Mortgage Rates Today, Oct. 9, 2024: Rates Plateau but Volatility Risk Remains

In brief

Yesterday, we discussed how strong employment data might cause the Fed to pause its planned cuts to general interest rates. This morning's Financial Times had the same thought, asking, "Can rate cuts and good jobs numbers both happen?"

Of course, a buoyant labor market isn't all that's on markets' minds. They're worried, too, about spiking oil prices caused by the risk of escalating tensions between Israel and Iran. And the economic impact of Hurricanes Helene and Milton. And the presidential race.

So, they face a pile of known unknowns and, no doubt, some unknown unknowns (©️ Donald Rumsfeld). And there's little markets hate more than massive uncertainty.

All this likely means that investors are operating on a hair trigger. And they may react more sharply to news than they normally would.

Whether their reaction pushes mortgage rates higher or lower will depend on the nature of the news. And that's a complete unknown.

However, we can assume that this week's star report, the consumer price index (CPI), will send mortgage rates lower if prices have risen more slowly than markets are expecting. But they'll likely rise if inflation is hotter than expected.

Coming up

Mortgage rates today

With only one report due today, any changes in mortgage rates are unlikely to be driven by economic data. That's especially true as that report details wholesale inventories in August. That rarely gets investors' pulses racing.

However, 2 p.m. Eastern brings publication of the minutes of the last meeting of the Federal Reserve's rate-setting committee. These sometimes provide additional helpful insights into the Fed's thinking. But so much of great importance has happened since the meeting that the minutes will likely be woefully outdated.

Instead, markets may look for such insights from the speeches of senior Fed officials. Seven such speeches are scheduled for today on top of four yesterday and eight earlier in the week.

By this evening, these speeches might have revealed a consensus among the Fed's big hitters. Will that suggest more rate cuts to come or a pause?

Tomorrow

There are more Fed speeches due tomorrow and Friday. But those days are all about inflation.

Only a couple of months ago, consumer price indexes were the most consequential of all economic reports for mortgage rates. But then price rises slowed and the focus of the Fed and markets switched to jobs reports.

Still, tomorrow's CPI for September remains by far the most potentially influential report this week. And, if its data are shocking enough, could reassert its dominance.

The report has four headline figures. Two cover the reporting month (September) and two others are year-over-year (YOY) numbers (Oct. 1, 2023, to Sep. 30, 2024).

One for each period measures changes in all the prices in the survey. And the other shows the same after stripping out food and energy prices. That latter one is called "core" CPI because it reveals the underlying trend after excluding the most volatile prices.

With inflation reports, mortgage rates are likely to drop if numbers are lower than markets are expecting. But those rates could rise if they're higher. And a report that exactly matches forecasts is often a non-event.

MarketWatch says markets are expecting:

• September CPI — 0.1%, down from August's 0.2%
• September core CPI — 0.2%, down from August's 0.3%
• YOY CPI — 2.3%, down from August's 2.5%
• YOY core CPI — 3.2%, unchanged from August
  

Remember, we'd like tomorrow's numbers to be even lower than markets are expecting.

Friday

Friday's calendar leads with the producer price index (PPI) for September. It's the CPI's weedy little brother, with much less potential to affect mortgage rates than his big sister.

Still, the PPI can have some impact so it's worth watching. We'll brief you more fully on that tomorrow.