Markets under heavy pressure due to high Producer Price Index

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Published Date 3/14/2024

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: Higher

Mortgage rates are moving higher today. The MBS market worsened by -3 bps yesterday. This was not enough to increase mortgage rates or fees. The market experienced low volatility yesterday.

Today's Rate Forecast: Higher

Jobs: Initial Weekly Jobless Claims were 209K versus estimates of 218K. The 4 week moving average dipped to 208K. Continuing Claims were 1.811M versus estimates of 1.900M.

Retail Sales: February headline Retail Sales were lighter than expected, up 0.6% versus estimates of 0.8% and as a double-whammy, January was revised lower to -1.1%. Ex-autos, Retail Sales were up 0.3% versus estimates of 0.5%.

Inflation: Headline Feb Producer Price Index (PPI) was DOUBLE market expectations, up 0.6% versus 0.3% on a MOM basis and up 1.6% versus 1.1% on a YOY basis and the highest since June of 2022. Core (ex food and energy) PPI was up 0.3% versus estimates of 0.2% on a MOM basis and 2.0% versus 1.9% on a YOY basis.

Today's Potential Rate Volatility: High

This morning markets are getting hammered by the inflation data. Volatility has started 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.