The latest inflation report has sparked discussions around the possibility of fewer rate cuts and even potential Fed rate hikes, stemming from stronger-than-expected CPI figures. The PPI report confirmed these concerns, but some core components indicated a possible easing in inflation. Following the release of disappointing retail sales figures, the 10-year yield fell to 4.52%, resulting in mortgage rates dipping below 7%. This shift presents homebuyers with opportunities, although further drops below 5.75% may depend on labor market dynamics and future Fed actions.
The recent CPI report suggests fewer rate cuts may be needed, with inflation reports generally hotter than normal prompting speculation about potential Fed rate hikes.
Despite climbing mortgage rates, a softening in PCE inflation signals potential for reduced rates if economic data continues to weaken.
The dip in retail sales expectations has led to a decline in the 10-year yield, creating an opportunity for homebuyers with mortgage rates falling below 7%.
Economic data trends indicate that mortgage rates could drop significantly if the labor market weakens or the Fed cuts rates further.
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