What does positive inflation data mean for mortgage rates?

Inflation | Mortgage Rate News

Positive inflation data may show encouraging results for the Fed

The U.S. Department of Labor released its quarterly Employment Cost Index on Friday. Data showed that private-sector wage growth only rose 1.2% in Q3 compared to 1.6% in Q2. Slowing wage growth should help cool some inflationary pressure.

Consumer spending numbers were also released on Friday and showed that consumer spending is still on the rise. Personal consumption expenditures price rose 0.3% in August and has increased 6.2% in the in the 12 months after September 2021.

ECI is a metric that the Federal Reserve tracks closely. A downturn there could be the start of inflation slowing. If that starts to occur, The Fed may start to dial back interest rates.

Where did mortgage rates end the week?

While stocks and other markets ended the week up big, a 30-year fixed-rate mortgage did tick above 7% and ended the week at 7.08%. Economic data was mostly positive this week, but it’s believed that the mortgage rate market is more interested in next week’s announcement from the Federal Reserve.

What’s on the calendar for this week?

News from the Federal Reserve is expected to dominate the week with an announcement on interest rates on November 2nd. Additional events for this week are as follows:

Monday, October 31st

Chicago PMI

Tuesday, November 1st

Job Openings & Quits
Construction Spending
Motor Vehicle Sales (SAAR)
S&P U.S. Manufacturing PMI (Final)

Wednesday, November 2nd

ADP Employment Report
Rental vacancy rate
FOMC announcement & Fed Chair Powell press conference

Thursday, November 3rd

Initial Jobless Claims
Continuing Jobless Claims

Friday, November 4th

Nonfarm payroll data
Unemployment rate
Average hourly earnings
Labor-force participation rate, ages 25-54  

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