Austin Klar reports the Consumer Price Index was flat month-over-month for the first time in two years, surprising markets and sending mortgage rates below 7%. The Fed now expects only one rate cut in 2024, down from three cuts it had projected earlier.
Finally, some positive news on the inflation front. For the first time in 2 years, prices as measured by the Consumer Price Index, CPI, were flat month over month, but they still increased 3.3% compared to last year, which is a bit of a ways off from the Federal Reserve's stated 2% target rate for inflation. The flat CPI reported beat analyst expectations of 0.1% growth month over month, and that had a great impact on both treasury yields and mortgage rates. As you can see, the average 30-year fixed rate dropped below 7% for the first time in a couple of months, a huge 18 basis point drop in a single day. The Federal Reserve The Fed also released its rate cut projections this year, and there is still one cut potentially on the table, although that's down from the 3 rate cuts it projected when it released its projections earlier this year. Obviously, these are just projections. Nothing is certain. We're gonna need more good inflation data and softer labor data in order for that to happen. Follow me for more market updates.
