Article Summary
The Consumer Price Index (CPI), a significant economic report that often causes fluctuations in mortgage rates, was released on Tuesday. Inflation and interest rates are closely related, with higher inflation usually coinciding with higher rates. However, today’s CPI data was to be taken with caution due to the uncertain impacts of tariffs and trade deals on the price of imported goods. The report showed a slightly lower inflation rate than expected, but mortgage rates still slightly increased due to later market movement.
What This Means for You
- Be aware of the impact of the CPI report on mortgage rates, even if the effects are not immediately clear.
- Stay informed about tariffs and trade deals, as they can influence the price of imported goods and materials, which in turn affects inflation and interest rates.
- Keep in mind that even if inflation is lower than expected, other factors can still cause mortgage rates to increase.
- Be prepared for fluctuations in the market and understand that mortgage rates can change daily due to various economic reports and events.
Original Post
Tuesday brought the release of an economic report that has frequently been responsible for big swings in mortgage rates. The Consumer Price Index (CPI) is the earlier of the two big inflation reports from the US government, and inflation is a big deal for interest rates. In general, higher inflation coincides with higher rates and vice versa.
But today’s CPI data was likely to be taken with a grain of salt due to the to-be-determined impacts of tariffs and trade deals on the price of imported goods and materials. In other words, if inflation came in lower than expected, it wouldn’t matter as much as normal because. The only real risk was that inflation would come in higher than expectations, thus suggesting that any tariff-related impact would be hitting an already elevated price trend.
Thankfully, today’s report was slightly lower than expected, even though it moved up from last month’s levels. As expected, that didn’t do anything to help rates. In fact, the average lender is just a hair higher than yesterday owing to market movement that happened later in the day.
Key Terms
- Consumer Price Index (CPI)
- Inflation
- Mortgage Rates
- Interest Rates
- Tariffs
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