Mortgage Rates

With the full release of all the data for PPI and CPI—albeit delayed—we now have a clearer picture that the recent wars have pushed inflation to a three-year high.

The Federal Reserve has made no clear indication of its plans, but for the foreseeable future, much of the speculation points toward keeping rates at their current levels, with no plans to raise or cut them.

Consumer Sentiment reports, as well as the Federal Reserve’s Beige Book, have also provided insight that conditions are slowing down, as businesses appear to be tempering activity amid the war in Iran. This should signal an overall slowdown across numerous markets.

Price Producer Index (PPI)
The producer-price index jumped 0.5% last month, the government said Tuesday, to mark the fourth straight big increase. Economists polled by the Wall Street Journal had forecast a sharper 1.1% advance.

Core PPI
U.S. inflation at the wholesale level rose to a three-year high in March due to surging oil prices tied to the Iran war, but aside from energy, the increases in the cost of other goods and services were surprisingly tame. 

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw a decrease of -0.09%, with the current rate at 5.65%
• 30-Year FRM rates saw a decrease of -0.07%, with the current rate at 6.30%

MND Rate Index

• 30-Year FHA rates saw a decrease of -0.03% for this week. Current rates at 5.88%
• 30-Year VA rates saw a decrease of -0.04% for this week. Current rates at 5.89%

Jobless Claims
Initial Claims were reported to be 207,000 compared to the expected claims of 215,000. The prior week landed at 218,000.

What’s Ahead
Next week is the Federal Reserve’s PCE Index, which is known to be more timely in its data releases. This will be followed by the Personal Income and Spending data. Both are strong indicators of the current state of the market for consumers.

The core CPI and PCE data have been released, leaving only the non-core CPI data delayed. Amid the Iran war, inflation has once again risen to higher levels, with most sectors seeing widespread price increases due to higher fuel and energy costs. As fuel costs rise, there is a knock-on effect across other consumer products as well. However, inflation has remained within expectations when considering the impact of the war.

PCE Index
Shortly before the start of the Iran war, a key measure of U.S. inflation rose at an excessive pace for the third month in a row, underscoring the latest challenge facing the Federal Reserve as it tries to squelch stubborn price pressures. The personal-consumption price index, the Fed’s preferred price gauge, rose by 0.4%, matching the forecast of economists.

Consumer Price Index
In March, the Consumer Price Index for All Urban Consumers rose 0.9 percent, seasonally adjusted, and rose 3.3 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy increased 0.2 percent in March (SA); up 2.6 percent over the year (NSA). CPI for all items rises 0.9% in March; gasoline up.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw a decrease of -0.03%, with the current rate at 5.74%
• 30-Year FRM rates saw a decrease of -0.09%, with the current rate at 6.37%

MND Rate Index

• 30-Year FHA rates saw no change for this week. Current rates at 5.91%
• 30-Year VA rates saw no change for this week. Current rates at 5.93%

Jobless Claims
Initial Claims were reported to be 219,000 compared to the expected claims of 210,000. The prior week landed at 203,000.

What’s Ahead
The most significant upcoming releases will be additional inflation data from the remaining CPI and PPI reports, along with the Federal Beige Book, which will provide insight into the current state of the economy.

With the continued delay in the CPI and PCE inflation data, this week’s headlines will focus on unemployment figures. Job reports show an increase of 178,000 workers, though this growth is unlikely to persist given the current state of the economy. Unemployment data has also shown a positive release, reflecting a slight decrease from the previous report.

Since the Federal Reserve discontinued rate cuts in December, the outlook remains highly uncertain as it continues to grapple with numerous aspects of the current economic environment.

Unemployment Data
The U.S. added a greater-than-expected 178,000 jobs in March and the unemployment rate fell a tick to 4.3%, signs that the labor market is holding firm even as the economy undergoes another spasm of uncertainty tied to the Iran war. The increase in employment in March, the biggest in 15 months, was padded by the return of 31,000 striking nurses. Better weather last month may have also helped.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw an increase of 0.02%, with the current rate at 5.77%
• 30-Year FRM rates saw an increase of 0.08%, with the current rate at 6.46%

MND Rate Index

• 30-Year FHA rates saw a decrease of -0.19%, with current rates at 5.91%
• 30-Year VA rates saw a decrease of -0.19%, with current rates at 5.93%

Jobless Claims
Initial Claims were reported to be 202,000 compared to the expected claims of 212,000. The prior week landed at 211,000.

What’s Ahead
We should see the PCE index data (the Fed’s preferred gauge for inflation) as well as CPI data released.