Well, we got a tame PCE report this morning, which would normally be good news for mortgage rates. But instead of seeing bond yields drop and relief come, rates are under pressure once again. Part of the reason might be that GDP (and consumer spending) also came in stronger-than-expected today. The other might be that bond traders are awaiting another key jobs report due out Friday. There’s also the simplest explanation: that the trend is just not our friend right now. First things first. The Fed’s preferred inflation gauge, the PCE report, came in cooler-than-expected today. That should be good news for mortgage rates. Any inflation reading that is below forecast should in theory mean less pressure on bond yields (interest rates).
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