Portland Mortgage Market Update — July 19, 2024

Rates are relatively unchanged from last week. We saw a minor lowering in rates at the beginning of the week but they have worsened since. It was a relatively quiet week data-wise and the market is more or less waiting to hear what happens with next week's PCE report.

The PCE report is the Fed's preferred measure of inflation and it drops next Friday. Where the CPI is based on a survey of what Consumers are buying, the PCE report is based on a survey of what wholesalers are selling. So it measures more or less the same thing, but with a seemingly more accurate metric. The last PCE report was a 2.6% increase but after the CPI report last week showing prices lowering, we are hopeful for a more rate-friendly report to follow suit.

Consistent data is what the Fed craves! Fed Chair Powell spoke this week and held the line that they need more consistent data to support that inflation is lowering. At the Economic Club of Washington, he said the recent reports showing tamer inflation "do add somewhat to confidence" that inflation is slowing sustainably. Currently, the market is betting almost 100% that there will be a rate cut in September and another one before the end of the year.