In a surprising turn of events, this week's biggest market mover for interest rates was a policy announcement by the Bank of Canada (BOC). The event was credited for prompting a re-think of the US Federal Reserve's rate outlook. Specifically, the BOC hiked rates despite about half the market believing it would hold steady.  While the odds that the Fed holds steady at next Wednesday's announcement are quite a bit better, the argument this week was that central banks might err on the side of tough love as opposed trusting that inflation would subside.   If we look at year-over-year numbers, it seems clear that inflation is subsiding.  The following chart shows both monthly and annual versions of the Consumer Price Index (CPI) at the "core" level (which excludes more volatile food and energy prices).  Core CPI is the most relevant inflation data as far as rates are concerned.  The next release is next Tuesday, one day before the Fed announces whether or not it is hiking rates again. If we zoom in on the monthly number only, we see a different theme.  Inflation is still well above target levels and still trying to make up its mind on the direction of the next move. This inflation dynamic is responsible for the division of opinion on the Fed's next move.  Actually, it would be better to think of the uncertainty in terms of the longer-term Fed Funds Rate path.  Indeed, the Fed is unlikely to hike next week (unless CPI is far above expectations).  Traders have been more interested in adjusting their expectations for where the Fed will be by the end of the year.  Less than a month ago, futures markets were betting on a full point of rate cuts by December.  As of Friday, the same metrics suggest the Fed might not be cutting rates at all in 2023.

June 9, 2023 Download our Mobile App: Download our Mobile App: Mortgage Rate Watch Rates Seen Staying Higher For Longer. Blame Canada? In a surprising turn of events, this week's biggest market mover for interest rates was a policy announcement by the Bank of Canada (BOC). The event was credited for prompting a re-think of the US Federal Reserve's rate outlook. Specifically, the BO... (read more) MBS Commentary Canada Doesn't Really Matter. Bring on CPI and The Fed Canada Doesn't Really Matter. Bring on CPI and The Fed The day began with a hunt for the mystery market mover behind the 8:30am spike in Treasury yields.  Once it was revealed to be Canada's jobs report,... (read more) Rob Chrisman Accounting, Digital, Broker Comp Tools; FHA, VA, USDA Developments; Why Rates are Stubborn Imagine my surprise at finding tag (like on the playground) is an organized sport. Imagine my surprise at finding two gas stations at the same intersection yesterday in Truckee, California with two different prices for unleaded! Rather than wait for ... (read more) Mortgage Rates 30 Yr. Fixed Rate 6.92% +0.02% Rate Change Points Mortgage News Daily 30 Yr. Fixed 6.92% +0.02 0.00 15 Yr. Fixed 6.30% +0.01 0.00 30 Yr. FHA 6.60% +0.02 0.00 30 Yr. Jumbo 6.68% +0.01 0.00 5/1 ARM 6.92% +0.02 0.00 30 Yr. VA 6.62% +0.05 0.00 Updates Daily - Last Update: 6/9 15 Yr. Fixed Rate 6.30% +0.01% Rate Change Points Freddie Mac 30 Yr. Fixed 6.71% -0.08 0.00 15 Yr. Fixed 6.07% -0.11 0.00 Updates Weekly - Last Update: 6/8 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 6.91% +0.22 0.83 15 Yr. Fixed 6.41% +0.26 0.84 30 Yr. Jumbo 6.78% +0.21 0.76 Updates Weekly - Last Update: 5/31 MBS / Treasuries UMBS 30YR 5.0 98.47 -0.05 Price / Yield Change MBS UMBS 5.0 98.47 -0.05 UMBS 5.5 99.98 -0.05 GNMA 5.0 98.64 -0.02 GNMA 5.5 100.06 +0.02 Pricing as of: 6/10 5:32PM EST 10 Year US Treasury 3.7430 +0.0230 Price / Yield Change US Treasury 2 YR Treasury 4.596 +0.077 5 YR Treasury 3.915 +0.057 7 YR Treasury 3.837 +0.041 10 YR Treasury 3.743 +0.023 30 YR Treasury 3.883 -0.003 Pricing as of: 6/10 5:32PM EST Latest Video The Fed will give up rate hikes if labor market begins to falter: Wharton p... Former Fed Governor Frederic Mishkin explains why the Fed shouldn't pause r... Delinquencies for commercial office spaces are going to rise, says Marcus &... Older households' spending outstripping that of younger generations, BofA I... Around the Web Eye on Housing Revolving Consumer Credit Growth Remains Near 25-Year High CNBC The Federal Reserve may pause its interest rate hiking campaign. What that means for you Calculated Risk Blog Q2 GDP Tracking: Around 1% to 2% Eye on Housing For Builders, Lot Shortage Eases But is Still a Problem CNBC The U.S. economy keeps skirting recession, but consumer sector might slowly be splitting apart Calculated Risk Blog The "Home ATM" was Closed in Q1; Mortgage Equity Withdrawal (MEW) turns negative in Q1 2023 CNBC Jobless claims increase more than expected to their highest since October 2021 CNBC Treasury yields climb as investors prepare for Fed policy meeting Eye on Housing Housing Affordability Posts Solid Gain but Still Much Lower from a Year Ago Calculated Risk Blog Hotels: Occupancy Rate Down 2.3% Year-over-year Calculated Risk Blog Lawler: Census 2020, Population Estimates, and Population Projections: Challenges for Demographers Wall Street Journal Home Insurers Curb New Policies in Risky Areas Nationally CNBC Euro zone enters recession after Germany, Ireland growth revision

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