April headline Producer Price Index much higher than expected

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Published Date 5/14/2024

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: Neutral

Mortgage rates are getting a little support today. The MBS market improved by +5 bps yesterday. This was not enough to decrease mortgage rates or fees. The market experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Inflation: The April headline Producer Price Index appeared to be much hotter than expected, rising 0.5% on a MOM basis versus estimates of 0.2%. However, that beat was mostly due to a downward revision in March from +0.2% down to -0.1%. YOY, it matched expectations at 2.2%. Core PPI (ex food and energy) was the same story on a MOM basis. YOY, it was up 2.4% versus estimates of 2.4%.

Optimism: The April NFIB Business Optimism Index was higher than expected, 89.7 versus estimates of 88.1.

The Fed: We will hear from Fed Chair Powell and Fed Governor Cook today.

Today's Potential Rate Volatility: Neutral

This morning markets took the PPI news better than expected with small positive trend. Volatility has started at 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.

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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.

Chris A. Heidt

NMLS: 38412

Northpointe Bank

8660 College Parkway, Suite 150, Fort Myers FL

Company NMLS: 447490

Cell: 239-470-6310

Email: chris.heidt@highlandmtg.com

Web: https://www.florida-homeloans.com/