Portland Mortgage Market Update — July 26, 2024

Rates spent most of the week elevated, with the market on watch for today's PCE report (more on that below). There wasn't much hard market-moving data coming out so the bond market more or less bickered with itself to worsening rates. Thankfully, today's PCE report was rate friendly and we are back even with where we ended last week.

Yes, I said PCE was "rate friendly", but not amazing. It wasn't quite the home run we hoped it would be that would lead to rate cut at the Fed's next meeting, but there was some promising data that would support the Fed's potential cut at their September meeting. The most promising component was the shelter aspect of the PCE report. It rose .27% in June (a drop from it .42% increase in May) which annualized comes out to a 3.24% increase year over year. Shelter has traditionally been a "stickier" component of the PCE report, and with that number moderating in line with the rest of inflation it provides the Fed some more support for lowering interest rates.

Next week brings some employment data and a Fed Meeting. After today's report a rate cut next week is unlikely, but do pay attention to the jobs reports coming out next Tuesday, Wednesday and Friday. Weaker employment numbers could yield to further improvement on rates.