![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week sharply higher which put significant downward pressure on rates. Rates improved almost every day last week. There were not a lot of economic releases but most of the ones we had helped considerably. Consumer prices rose 0.2% vs 0.3%. The core, which excludes volatile food and energy prices, rose 0.2% vs 0.3%. Producer prices rose 0.1% vs0.2%. The core rose 0.1% vs 0.2%. Weekly jobless claims were 237K vs 247K. There was some sharp weakness Friday morning in response to the surging consumer sentiment data. Sentiment came in at 72.6 vs 65.6. Mortgage interest rates still finished the week approximately better by over a full discount point.
Looking Ahead
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Retail Sales | Tuesday, July 18, 8:30 am, et |
Up 0.5% | Important. A measure of consumer demand. Weakness may lead to lower mortgage rates. |
| Industrial Production | Tuesday, July 18, 9:15 am, et |
Down 0.1% | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
| Capacity Utilization | Tuesday, July 18, 9:15 am, et |
79.5% | Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates. |
| NAHB Housing Index | Tuesday, July 18, 10:00 am, et |
55 | Moderately Important. A measure of single-family housing. Weakness may lead to lower mortgage rates. |
| Housing Starts | Wednesday, July 19, 8:30 am, et |
1.45M | Important. A measure of housing sector strength. Weakness may lead to lower rates. |
| Weekly Jobless Claims | Thursday, July 20, 8:30 am, et |
235K | Important. An indication of employment. Higher claims may result in lower rates. |
| Philadelphia Fed Survey | Thursday, July 20, 8:30 am, et |
12.7 | Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates. |
| Leading Economic Indicators | Thursday, July 20, 10:00 am, et |
Down 0.5% | Important. An indication of future economic activity. A smaller increase may lead to lower rates. |
Tame Inflation
The short-term outlook for mortgage interest rates swung the other way last week as inflation readings provided a much-needed reprieve from the upward trend.
Both the consumer price and producer price indices showed lower than anticipated headline numbers. The cores, which exclude volatile food and energy prices, were also lower than expected. This is significant because the Fed continues to indicate they are concerned about inflation and tame inflation readings will support the argument that additional rate hikes may not be necessary. The Fed looks at a combination of indicators, so this data helped a lot. However, the consumer and producer priceindices are not the Fed’s preferred inflation gauges (Core PCE) so we will need a lot more favorable data in the weeks and months ahead to convince them to pivot.
Be cautious with float/lock decision, especially surrounding economic releases, as market uncertainty continues.
