Rate Lock Advisory

Tuesday, August 12th

Tuesday’s bond market has opened in negative territory following mixed inflation data. Stocks are having a positive reaction to the same data, pushing the Dow up 354 points and the Nasdaq up 42 points. The bond market is currently down 5/32 (4.30%), but this morning’s mortgage should be close to Monday’s early pricing due to slight gains late yesterday.

5/32

Bonds

30 yr - 4.30%

354

Dow

44,329

42

NASDAQ

21,428

Mortgage Rate Trend

Trailing 90 Days - National Average

  • 30 Year Fixed
  • 15 Year Fixed
  • 5/1 ARM

Indexes Affecting Rate Lock

High

Neutral

Consumer Price Index (CPI)

This morning’s big news was the release of July’s Consumer Price Index (CPI) at 8:30 AM ET. It revealed consumer inflation was as expected last month with a 0.2% increase in the overall CPI reading and a 0.3% rise in the more important core data. Both of these readings pegged expectations. The conflicting results came in the annual readings that showed the overall rose at a 2.7% year-over-year pace to match June’s rate when analysts had predicted it would rise 0.1% to 2.8%. The bad news was a 3.1% annual rate in the core data that exceeded expectations of 3.0%.

Medium

Positive

Inflation News

Today’s inflation data supports the theory that tariff-related inflation is starting to show in the data and is making its way to the consumer. However, it appears that some traders had feared inflation would be worse than it was. Or, it wasn’t strong enough to prevent the Fed from cutting short-term rates at next month’s FOMC meeting, at least theoretically. This could explain why we have not seen a clear negative reaction to the data.

Medium

Unknown

Fed Talk

Tomorrow doesn’t have any economic data scheduled for release that we need to be concerned about. There are three Fed-member speeches that we will be watching though. None of them are expected to create major headlines, but all of them have the potential to do so. They are set for the first half of the trading day, meaning if there is a reaction it will come during morning and/or early afternoon trading. Market participants will be listening for any hints about how voting may go at the upcoming FOMC meetings.

Float / Lock Recommendation

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

MAC5 Mortgage, Inc.

Patricia Kotz

NMLS #229126 - MB# 100013531
NMLS Consumer Access
536 Honeysuckle Dr | New Castle, CO 81647

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