Consumer Price Index meets expectations

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Published Date 8/10/2023

Today's Mortgage Rate Summary

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up.

Rates Currently Trending: Neutral

Mortgage rates are moving sideways today. The MBS market improved by +4 bps yesterday. This was not enough to decrease mortgage rates or fees. The market experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Inflation: The headline July Consumer Price Index (CPI) increased by 0.2% on a MOM basis which matched expectations. YOY, it was up 3.2% versus estimates of 3.3%. Core (ex food and energy) also expanded by 0.2% on a MOM basis which matched expectations. YOY, it was up 4.7% versus estimates of 4.8%.

Jobs: Initial Weekly Jobless Claims were higher than expected, 248K versus estimates of 230K. The more closely watched 4 week moving average increased to 231K. Continuing Claims were 1.684M versus estimates of 1.710M.

Treasury Sales: We have an important 30Y bond auction at 1 pm ET today.

The Fed: Today we will hear from Bostic and Harker.

Today's Potential Rate Volatility: Neutral

This morning markets are mostly treading water. Volatility has started at moderate levels with inflation data pushing traders beyond our narrow trading channel.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Source: TBWS

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

All loans are subject to credit approval. Interest rates are subject to change daily and without notice. Current interest rates shown our indicative of market conditions and individual qualifications and will vary upon your lock-in period, occupancy, loan type, credit score, purpose and loan to value and lending source.