Mortgage Rates Today, Oct. 11, 2024: Rates Unperturbed as Markets Shrug Off Inflation Data

In brief

We were surprised yesterday when mortgage rates didn't rise further in response to that day's consumer price index (CPI). That may be at least partly down to how the financial media greeted the news.

"Inflation Cools Slightly in September," read The New York Times' headline. "Inflation Continues Its Bumpy Decline With Mixed September Reading, said The Wall Street Journal. CNN Business wrote, "America's inflation continued to cool in September."

They're sort of right. However, inflation rates in September were unchanged from August. True, the year-over-year (YOY) CPI inched lower but the YOY core CPI inched upward.

Does that really count as cooling, especially as all four figures disappointed market expectations? Anyway, let's not look gift horses in their mouths, and instead be grateful that markets chose to more or less ignore the CPI.

By the way, we've recently been talking about influences beyond economic reports that can affect mortgage rates. And we've mentioned oil prices a couple of times. Higher gas prices affect all sorts of consumer products, not just those you pay at the pump. So, they can be an important driver of inflation.

Tensions in the Middle East recently caused oil prices to spike. However, they've been moderating in recent days.

And, on Wednesday, Tom Kloza, global head of energy analysis at Oil Price Information Service, appeared on CNBC (video). He thought any spikes caused by a re-escalation in tensions would be short-lived. And he predicted much lower oil prices in 2025.

If Kloza is right, that will make the winner of next month's presidential election very lucky. He or she will no doubt bask in the feel-good factor of cheap gas, even though the conditions for the price dip were in place before the victor took office.

Coming up

Mortgage rates today

The producer price index (PPI) for September is due at 8:30 a.m. Eastern this morning. 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. It's built the same way as the CPI with four components. But, because it's less important, MarketWatch doesn't give market expectations for year-over-year figures.

So, here's what's currently expected for September's PPI:

• September PPI — Markets expecting 0.1%, down from August's 0.2%
• September core CPI — Markets expecting 0.2%, down from August's 0.3%

The rules are the same as for the CPI. For mortgage rates to fall, we'll likely need lower numbers than markets are expecting. But, given that markets shrugged off yesterday's much-more-important CPI, how likely are they to take today's PPI numbers seriously?

This morning's other economic report is due at 10 a.m. Eastern. And it's the preliminary consumer sentiment index for October. Markets are expecting this to improve, inching up to 71 from September's 70.1. For the sake of lower mortgage rates today, we'd rather it didn't go much higher than 71.

Next week

Bond markets will be closed next Monday for the Columbus Day holiday. So, mortgage rates shouldn't move that day. And we won't be publishing this daily "Mortgage Rates Today" update.

Things are slow next week until Thursday. That's when retail sales figures for September are due to be published.

These are typically nothing like as consequential for mortgage rates as employment and inflation data. Nevertheless, retail sales are an important gauge of economic activity and consumer confidence. So, they may well affect those rates.

Other reports scheduled next week would have to reveal spectacularly shocking data to move mortgage rates far. They're mostly ones that bond investors routinely ignore, though we will brief you on Thursday's industrial production report before it lands.