Austin KlarVanguard Properties · Lawyer Turned Real Estate Agent

Mortgage Rates Plummet After Great Inflation Reading

Name: Mortgage Rates Plummet After Great Inflation Reading
Uploaded: 2024-07-18T01:00:23+00:00
Duration: 44 s
Channel: Austin Klar
Description: In this market update, Austin Klar explains that June's core CPI rose only 0.1% month‑over‑month (rounded from 0.065%), marking the smallest core…

18 Jul 2024 · 1 min

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In this market update, Austin Klar explains that June's core CPI rose only 0.1% month‑over‑month (rounded from 0.065%), marking the smallest core inflation increase in three years and suggesting an annualized pace near 1%, well below the Federal Reserve’s 2% target. The modest inflation reading pushed 10‑year Treasury yields lower, which in turn drove mortgage rates down to their lowest levels since February as of July 12. Klar notes that sustained low inflation readings combined with softer labor data would be necessary to create any realistic prospect of a Fed rate cut this year, and he commits to continue monitoring these indicators for viewers.

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We're starting to get a nice little string of inflation readings that are inching mortgage rates down. June CPI data was recently released and it shows that core prices, which are the prices of goods and services excluding food and energy, rose to 0.1% since May, rounded up from 0.065%. This is the smallest increase in core CPI that we've seen in the last 3 years. And if the trend continued, we'd be at around 1% for the entire year. And remember that the Fed's target is 2%. The latest reading caused 10-year Treasury yields to fall, and when those yields fall, so do mortgage rates. And that's exactly what happened. As of Friday, July 12th, rates fell to the lowest level levels that we've seen since February. We'll need continued readings like this coupled with softer labor data in order to have any hope of a Fed rate cut this year. As always, I'll be keeping an eye on things so that you don't have to. So follow along for more market updates.