Portland Mortgage Market Update — January 12, 2024

Rates improved on the week thanks to some favorable inflation reports. The CPI that was released yesterday wasn't quite bond friendly, showing an uptick in inflation in December. Thankfully traders sifted through the underlying data and noticed some discrepancies in the report where the increase was a result of shelter costs and traders are beginning to realize the methodology the BLS is using for that component is flawed. The PPI report that was issued today fell .1%, when most economists expected a .2% increase. This is great news for rates since many of the components of the PPI carry over to the PCE report which is the Fed's preferred benchmark for measuring inflation. If this reflects on the coming PCE report (on Jan 26th) it may bode well for rate cuts to start happening sooner.

Next week brings a short trading week with the market being closed Monday for MLK day. There are a couple Fed Chairs speaking Wednesday ahead of their beige book being released, and some employment and housing reports coming later in the week. One of the Fed members speaking is Michelle Bowman who has traditionally gone on record asking for more rate hikes, so the market doesn't really listen to her anymore. If she changes course, however it may be an indicator the Fed at large is looking to start dropping.

The market may be closed Monday but not me! Things are starting to pick up and once rates drop we are going to see an influx of buyers and competition. A snowy weekend would be a great time to brainstorm ideas on how we can capitalize on this market NOW. Feel free to reach out anytime if you want to go over any strategies or marketing plans to get things rolling!

Take care, stay safe and warm, and have a great weekend!