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Mortgage rates fell this week, with the Fed doing a pivot on Wednesday, taking rate hikes off the table, and open to talking about rate cuts in 2024. The Fed announcement showed that they were expecting three rate cuts in 2024. When it came time for Fed Chair Powell to take questions, he was dovish which was surprising. November jobs were still strong, and while inflation is coming down, it is still too high. At this point, the market will start pricing in rate cuts more significantly now that the Fed has given that nod. If it is a soft landing like everyone is hoping, three to four cuts is realistic next year. A concern for next year was that the Fed would take too long to cut rates. We will see how the data comes in and what guidance the Fed will give in the coming weeks and months. The easing of monetary policy will be good for the economy and good for mortgage rates next year.

• U.S. 10-year Treasury on Thursday morning is at 3.92%

• CPI came in higher than analyst's expectations (+0.1% m/m and 3.1% y/y vs expectations of 0.0% m/m and 3.1% y/y)

• Core-CPI came in-line with analyst's expectations (+0.3% m/m and 4.0% y/y)

• PPI came in-line with analyst's expectations (+0.0% m/m and 2.0% y/y)

• Retail Sales came in higher than analyst's expectations (0.3% m/m vs expectations of -0.1% m/m)

• Initial Jobless Claims came in lower than analyst's expectations (202k claims vs expectations of 220k claims)

• Mortgage Applications rose 7.4% this week