US consumer prices rose 2.4 percent in March from year ago

___

Published Date 4/11/2018

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 to slightly higher so far today. The MBS market worsened by -8 bps yesterday. This probably wasn't enough to worsen mortgage rates or fees. The rates experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Housing: Weekly mortgage applications decreased by -1.9%. Purchases were down -2.0% and refinances were also down by -2.0%.

Inflation: The March Consumer Price Index matched market expectations but did show an increase in the pace of inflation for consumers, and we saw a rare "two handle" on the Core YOY number. Headline CPI YOY hit 2.4% vs est of 2.4%, but that is up from Feb's pace of 2.2%. The Core CPI YOY hit 2.1% which matched estimates, but it was a hotter pace than Feb's rate of 1.8%.

Fed: Today we get the Minutes from last month's FOMC meeting where they raised rates.

Treasury Dump: We have our 10 year Treasury note auction today at 1EST.

China: Their CPI YOY hit 2.1% vs est of 2.6% and their PPI hit 3.1% vs est of 3.2%.

Eurozone: The ECB started their Non-Monetary Policy meeting. ECB President Mario Draghi said “The direct effects (of tariffs) are not big,” “In the end the key issue is retaliation.”

Today's Potential Rate Volatility: Average

Normally, given the above inflation numbers, mortgage rates would be pushing rather significantly higher. That's not the case so far today. The main reason is that the market is concerned with the China trade issues and the potential of the US entering the conflict in Syria. These two geopolitical issues are pushing money into safety plays like treasuries. There's a possibility we could see mortgage rate volatility given the increased geopolitical issues.

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.

http://nmlsconsumeraccess.org/

NMLS # 75605