http://MikesDailyMarketReport.com: The Producer Price Index (PPI), which measures inflation with the wholesale sector, rose 0.8% in May. The Core PPI, which excludes food & energy, rose by 0.5% in May, as it's YoY dropped from 8.6% in April to 8.3% in May. This index doesn't always get a lot of respect because many times those costs don't always get passed onto the Consumer; however, in today's high inflation environment, it's receiving more respect. The Fed begins their 2 day meeting (FOMC) today, which they'll provide their Announcement tomorrow (around 11:15 am PST). The Markets raised their odd of the Fed increasing their announce rate hike from a 0.5% to 0.75% hike tomorrow. Personally, I don't think this will happen tomorrow, but could be announced for next FOMC. Just from past experience with Powell as the Chair, he doesn't like to surprise the Markets, so I think he will maintain the 0.5% stance at this meeting, but communicate further hikes for future meetings. that's just a personal thought; but, it's possible that he could surprise us tomorrow. Also, The Markets raised the odds of a possible recession, if coupled with high inflation, then would be our worst nightmare (Stagflation). Fingers crossed that this doesn't occur. MBS is Down about 56 bps today. This is on top of the Market closing down 144bps yesterday and down 73bps last Friday. So, the Market is down over 250bps, which means that pricing for a No Cost loan last week will cost more than 2.5% points now. This has pushed the average 30 year fixed loan up into the 6% range now. We do have a solution for this, so if you're in need of a lower rate loan program, then please send me a message. Meanwhile, Yields are at the highest place in the last 10-11 years; currently sitting around 3.45% now.
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