Market Recap - April 12, 2024

Rates shot up well above 7% this week due to higher inflation. How high will they go? Will they settle down? Expect rates to be high-6% to low-7% range for another 6 months. Hopefully, they won’t go higher than this.

The Consumer Price Index (CPI) came out this week showing a higher than expected increase. Wall Street hates inflation, as it diminishes the value of assets. The big culprits of the increase in inflation were housing and car insurance.

The housing component - a.k.a. shelter costs - of CPI makes up 45% of this index. Because shelter costs are still coming in high, it skews the CPI figure. Shelter costs came in up  0.4% this month. If you annualize this, it still shows shelter costs going up around 5% per year, which is well above the Fed's overall target inflation of 2%.

We also have to watch out for some potential increases in gas prices. With the recent escalation between Iran and Israel, if new fighting begins, it definitely could put pressure on higher gas prices, which could further push up inflation.

Progress on inflation will be slow, so rates won't be dropping quickly.

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Bill Gaylord, NMLS 680603 | Gaylord-Hansen Team at CrossCountry Mortgage | 858-776-6830

Rate Source: Mortgage News Daily (https://www.mortgagenewsdaily.com)

The information contained is the viewpoint of the presenter(s). Individuals should consult their own financial representative.

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