WTMS Blog Today: What’s Up in Mortgage Today – 09/11/24

UMBS opened down 7 basis points, and stock futures dropped 20 points. Bonds were initially stronger ahead of the CPI data release but lost those gains after the report. CPI numbers were close to expectations, with a 0.2% monthly increase and a 2.5% year-over-year gain. Core CPI rose by 0.3%, driven by higher shelter costs, which were a key factor in the bond market’s initial sell-off. Despite this, the market largely shrugged off the data, regaining lost ground by midday. The Fed Funds futures market is now firmly expecting a 25 basis point rate cut next week, as inflation pressures seem manageable but persistent. The day’s moves emphasized that the pace of future cuts matters more than the size of the first. Bonds initially reacted negatively to shelter inflation but soon stabilized, with minimal lasting damage to the overall rate outlook.

#MortgageUpdate, #CPIReport, #FedRateCut, #BondMarket, #ShelterInflation