Higher Inflation 

Mortgage and Lending with Peoples Home Loans NMLS 13530


Mortgage rates spiked higher late last week, as investors bought stocks and sold bonds. The volatility continued this week, but the net effect was favorable for mortgage rates. Despite an upside surprise in the CPI inflation data and stock market gains, mortgage rates ended the week a little lower. 


The Consumer Price Index (CPI) is the most widely followed monthly inflation indicator, and the readings for January were higher than expected. CPI was 1.4% higher than a year ago, which was the highest level since October 2014. 



Core CPI, which excludes the volatile food and energy components, was 2.2% higher than a year ago, which was the highest level since June 2012. Economists often look at core inflation rather than the overall rate to get a clearer sense of the underlying trend. 


While some forces have helped hold down inflation over the past year, including the stronger dollar and lower oil prices, the service sector has remained strong and costs have been rising. In particular, shelter and medical costs have increased over the past year. Mortgage rates are highly influenced by the outlook for future inflation. If the trend toward higher inflation accelerates, it would be negative for mortgage rates. 




Looking ahead, Existing Home Sales will be released on Tuesday and New Home Sales on Wednesday. Durable Orders, an important indicator of economic activity, will come out on Thursday. The Core PCE price index, the Fed's preferred inflation indicator, and the second estimate of fourth quarter GDP will be released on Friday. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday. 


Posted by

Michael Dutra

Regional Sales Manager

Peoples Home Loans

Phone: (508) 372-9176

Cell: (401) 486-6894

Email: Mike@TeamDutra.com

Website: www.TeamDutra.com 


Lending in ALL 50 States


NMLS 13530

Comments (2)

Emerald Coast Realty
Emerald Coast Realty - Pensacola, FL

It all looks good to me!

Feb 23, 2016 03:02 AM
Certified Mobile Notary Signing Agent - Smith Mountain Lake, VA
Highest Ranked Certified Mobile Notary in Virginia

Rates change and we all know that.   Picking the exact bottom is practically impossible. But now while rates are holding in a lower range is the time to move before election year politics move them higher.   Contact Michael Dutra today unless you're in Virginia where you should contact ME for the latest on daily rate changes.

Feb 27, 2016 04:46 PM