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Mortgage rates had another volatile week, with rates finishing lower for the week. We saw a flight to quality, with investors selling risky assets (think of stocks and risky bonds) and buying U.S. Treasuries, driving those yields lower on the treasuries. The cause of the flight to quality was due to liquidity issues in several regional banks, along with liquidity issues in a large European bank. It appears that those risks have stabilized for the time being. The Fed is having its FOMC meeting next week, and it is still unknown if it will raise rates. If the markets are stable, they will raise 25 bps. Inflation is still an issue and the fear the Fed has is that they pause, and that inflation is sticky and does not come down.

 

• U.S. 10-year Treasury closed at 3.57% on Thursday afternoon

• CPI came in-line with analyst's expectations (+0.4% m/m and +6.0% y/y)

• PPI came in below analyst's expectations (-0.1% m/m vs expectations of +0.3% m/m)

• Retail Sales came in-line with analyst's expectations (-0.4% m/m)

• Initial Jobless Claims came in below analyst's expectations (192k claims vs 205k claims)

• Mortgage Applications rose 6.5% this week