Inflation in focus – THIS is the kind of week the Fed will use to decide on future rate hikes

Mortgage rates we’re on a total roller coaster last week up and down then up and up and up and down. There were a few market impacting events that happened during the week but those weren’t the main influences on the mortgage market That came with a heavy slew of jobs related data which is the very thing that Jerome Powell and the Fed have their eye on from now until their next meeting in September. Then we follow that up with this week’s upcoming economic data which will be several fed members speaking at various events, and inflation data trickled out throughout the week. So as much as I would like to say that last week could have been the most volatile we’ll see for a while, it probably won’t be, This week because this week could be just as volatile or even more volatile.

As you have heard me explain in the past when it comes to monitoring mortgage rates and its association with the 10-year yield we saw the 10-year yield breakthrough 4% and stay above 4% throughout all of last week. Inevitably this means that elevated mortgage rates will most likely stay this way until there is a dramatic turn for the better in the 10-year yield market as well as the mortgage-backed security market. Until we see that happening there is no honest way for me to advocate that lower mortgage rates are on the horizon. Therefore, if you’re looking to buy or refinance, what you see is what you get, and it will remain this way for quite some time.

And here’s a quick look at what’s coming up in the markets this week.

Monday: A couple of Fed members speak.

Tuesday: We get some wholesale inventory data what will tell us whether supply constraints are easing or worsening.

Wednesday: Crude Oil Inventories, 10-year bond auction

Thursday: CPI month over month, CPI year over year, Core CPI month over month, unemployment claims. This and Friday are going to be the MOST critical of this week…and likely the rest of this month.

Because on Friday: we get Core PPI month over month, PPI month over month, and preliminary Consumer Sentiment. So as you can see CPI and PPI data will RULE the WEEK. Hold on Tight!

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