Markets get a reprieve on the Producer Price Index

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Published Date 4/11/2024

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 under pressure today. The MBS market worsened by -93 bps yesterday. This was enough to increase mortgage rates or fees. The market experienced high volatility yesterday.

Today's Rate Forecast: Neutral

Inflation: The Headline March Producer Price Index (PPI) rose by 0.2% versus estimates of 0.3% on a MOM basis and 2.1% versus 2.2% on a YOY basis. The Core (ex food and energy) PPI, increased by 0.2% on a MOM basis which matched expectations. YOY, it increased by 2.4% versus estimates of 2.3%.

Jobs: Initial Weekly Jobless Claims were 211K versus estimates of 215K. The 4 week moving average remained at 214K. Continuing Claims ticked up to 1.817M from 1.789M.

Central Banks: The European Central Bank kept their key interest rate at 4.5% and continued to signal that they were getting close to meeting their three tests on altering their rate potentially by June.

Treasury Auction: We have an important 30 year Treasury bond auction at 1 pm.

The Fed: We will hear from Williams, Bostic and Collins.

Today's Potential Rate Volatility: High

This morning markets continue to be under pressure due to inflation data. Volatility remains high.

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.