Mortgage rates had been moving higher fairly rapidly over the past 2 weeks with the average lender easily into the 7% range for a top tier conventional 30yr fixed scenario.  It was clear that rates were responding to stronger-than-expected economic data and apprehension that we could see more of the same from subsequent reports.

Today brought one of the most important among those subsequent reports: June's Consumer Price Index (CPI).  This is the most influential inflation report on any given month as far as interest rates are concerned and it ended up providing some much needed relief today.

Inflation cooled to a monthly pace that is very close to in-line with the Fed's inflation target.  To whatever extent such a pace can be maintained or improved upon, the Fed wouldn't need to continue hiking rates and the rest of the bond market wouldn't need to continue defending against that possibility.

In that sense, today marks the first step in a long journey, but one that nonetheless helped rates move more than an eighth of a percentage point lower--once again returning to the high 6% range.