The results are in, and both the CPI and PPI inflation reports confirm that inflation has come in lower than expected, surpassing expectations. This is a great result leading forward for the next FOMC Rate Decision meeting, as there is high optimism now that the rate cuts are coming this year. With next week’s FOMC Minutes guiding the next meeting, we can expect to hear their stance going forward. We also see a matching indicator in Retail Sales, showing a significant gain across the board, while auto sales had the largest increase in one and a half years. This aligns with previous consumer confidence reports and will serve as a good reference when making the next rate decision for the Federal Reserve.
Consumer Price Index
Inflation stays mild; the 2.9% annual pace is at its lowest since March 2021. The bulk of inflation in July was concentrated in housing; accounting for 90% of the increase in the consumer price index. Energy and food were on the tamer side. Energy prices were flat and the cost of food rose 0.2%.
Producer Price Index
In July, the Producer Price Index (PPI) for final demand increased by 0.1 percent.eh Prices for final demand goods moved up 0.6 percent, and the index for final demand services fell 0.2 percent. Over the 12 months ending in July, the overall prices for final demand increased by 2.2 percent. Wholesale inflation shows few warning signs. Fed interest-rate cut is still on track.
Primary Mortgage Market Survey Index
- 15-Yr FRM rates are seeing an increase by 0.03% with the current rate at 5.66%
- 30-Yr FRM rates are seeing an increase by 0.02% with the current rate at 6.49%
MND Rate Index
- 30-Yr FHA rates are seeing a 0.01% increase for this week. Current rates at 6.10%
- 30-Yr VA rates are seeing a 0.02% increase for this week. Current rates at 6.12%
Jobless Claims
Initial Claims were reported to be 227,000 compared to the expected claims of 234,000. The prior week landed at 233,000.
What’s Ahead
With only the FOMC Minutes coming up next week, the rest of the week has a notably light schedule. However, the regular weekly reports are still expected to be delivered as usual.