Markets under pressure due to Consumer Price Index

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Published Date 3/12/2024

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 -5 bps yesterday. This was not enough to increase mortgage rates or fees. The market experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Optimism: The February NFIB Small Business Optimism Index dropped from January's level of 89.9 to 89.4, estimates were for 90.6.

Inflation: February Headline Consumer Price Index (CPI) grew at a MOM pace of 0.4% versus estimates of 0.4%. YOY, it was up 3.2% versus estimates of 3.1%. Core (Ex food and energy) CPI was up 0.4% on a MOM basis versus estimates of 0.3% and 3.8% on a YOY basis versus estimates of 3.7%.

Treasury Auction: We have an important 10Y Note Auction today at 1 pm ET.

Today's Potential Rate Volatility: Neutral

This morning markets are under mild pressure due to the inflation data. Volatility started low but has risen to moderate levels.

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.