The Consumer Price Index came in today dead flat, less than the 0.1% anticipated gain. That lowered the YOY reading by one tick to +3.3%. Of note, Rents have risen 5.3%, Fuel dropped -2.0%, while pesky car insurance is still up 20.0%, all from what you paid last summer.
The Fed left interest rates unchanged today, no surprise. Jerome Powell indicated that inflation will most likely rise again in the coming months and resultantly, interest rates will continue “higher for longer”. No rate drop scheduled for July either, but interestingly enough, the CME Group now shows that the probability of rates being 1/4% lower in September is 61.5%, 75.3% by November, and 93.2% by December. We’ll see.
While Jerome is scowling, a certain lizard can’t seem to wipe the smile off his face.
Mortgage pricing which soared 50 bps after the CPI announcement, has since retracted by 50% and is now up 26 bps. We’re still up on the day, which has pushed rates down near YTD lows.
