Record Single Day Drop in Rates After Inflation Comes in Cool

[Robin Simon]

In case anyone missed it - might have been the biggest mortgage rate drop in history on Thursday, good breakdown from Mortgage News Daily

Why was this week's CPI so important?

First off, almost every CPI report has been important in 2022. No other economic report has caused more volatility for the bond market. Because bonds dictate interest rates, we can also say CPI has caused just as much volatility in the mortgage world.

CPI is the king of economic data in 2022 because inflation is the dominant focus of the financial market and the Federal Reserve (aka "the Fed"). The Fed sets policies intended to keep inflation at a low, stable level. Runaway inflation causes the Fed to hike interest rates in order to slow down the demand side of the economy. In the post-pandemic environment where a good amount of inflation is thought to be driven by the SUPPLY side of the economy, that's resulted in the Fed being particularly aggressive in trying to tamp down demand.

Full Article: 

https://www.mortgagenewsdaily....