"The Consumer Price Index jumped 3.3% in March, up from 2.4% annualized growth in February. The all-items index rose 0.9% month over month, marking the largest increase in nearly four years."
"Expect mortgage rates to stay in the current ~6.3% range for the foreseeable future. The inflation or labor narratives would need to change meaningfully to see movement in either direction."
"MBS prices are likely to be very sensitive to inflation numbers in the coming months, and markets will likely want to see several months of geopolitical stability and lower inflation prints before bringing down yield expectations."
The 10-year Treasury yield is around 4.3%, prompting investors to seek compensation for inflation risk. Recent economic data, including a 3.3% rise in the Consumer Price Index, supports the Fed's cautious stance. Nonfarm payrolls increased by 178,000 in March, with the unemployment rate steady at 4.3%. Mortgage rates are expected to remain around 6.3%, with any changes dependent on inflation and labor market narratives. MBS prices will be sensitive to inflation, and sustainable lower mortgage rates hinge on controlling inflation.
Read at www.housingwire.com
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