A few inflation reports, but no change to rates.

Happy Friday from Local Mortgage!

Inflation was the headline economic data point this week. One report was right in line; another was a bit higher than expected but had minimal impact on rates. All in all, we will end the week pretty much right where we started at 6.25% for our best 30-year fixed conventional rate.

The Consumer Price Index or CPI is one of the most widely watched inflation indicators. July’s Core CPI, which excluded food and energy prices, rose by 0.3% and is up 3.1% year over year. This increase matched expectations so the report had a slightly positive, albeit small, impact on rates.

The more surprising report came from the Producers Price Index or PPI, which measures the changes in selling prices received by domestic producers. July’s PPI jumped 0.9%, which was far above the consensus forecast of 0.2%. PPI is often considered a leading indicator of consumer price inflation so this hotter than expected reading somewhat dampened this week’s positive momentum.

Outside of the PPI report, there seems to be some strong steam behind the expectations of a September rate cut. Investors will continue to keep a close eye on inflation reports between now and the mid-September FED meeting.  

Next week will be a light week for economic reports. The housing sector will be in the spotlight with housing start data on Tuesday and existing home sales on Thursday.

Hope everyone has a great weekend and thanks for reading.