Mortgage Rates Today, Sep. 26, 2024: Might This Low-Volatility Period End Soon?

In brief

As we explained yesterday, mortgage rate movements over the past eight days have been much more modest than we feared. But the next eight days could be different.

The most likely economic report to trigger a significant change is next Friday's jobs report for September. But today's and tomorrow's data are also potential causes of volatility.

Read on for the details.

Trigger warning

Today, we're due two second-tier reports: GDP and durable goods orders. And the personal consumption expenditure (PCE) price index, the Federal Reserve's favorite inflation measure, is on tomorrow's calendar.

Yesterday, we quoted a Veterans United analyst who had written that growth and inflation data have "stayed mostly consistent" recently, and we agreed with him.

So, we think it unlikely that today's and tomorrow's reports will move mortgage rates far. But "unlikely" is very different from "certain." And you should keep a close eye on those data as they're published. Details of what to expect are below.

Next Friday's monthly jobs report (formally, the employment situation report) is arguably at the very top of the first tier of reports. It really does have the potential to send mortgage rates soaring or plummeting.

Until quite recently, inflation reports were the most important. But, now price rises are close to the Fed's target, the labor market is front of mind for markets and the Fed.

Coming up

Mortgage rates today

Today's reports are:

• Initial jobless claims for the week ending Sep. 21 — Markets are expecting a small increase to 223,000 from 219,000
• Durable-goods orders for August — Markets are expecting these to plummet to -3.0% from July's +9.8%
• Third and final reading of GDP in the second quarter — Markets are expecting this to be unchanged since the second reading at 3.0%

Mortgage rates are likely to fall if those figures are worse than markets are expecting. That's a higher number for initial claims for unemployment benefits but lower ones for the others.

The Fed is fielding a whopping nine senior officials who share seven speaking engagements today. They include Fed Chair Jerome Powell. We still doubt their message will have changed since last Wednesday's comprehensive update. But we can't be sure.

Mortgage rates tomorrow

Tomorrow's PCE price index for August has four headline components. Two cover the month surveyed (August) and the other two measure year-over-year price changes (Sep. 1, 2023, to Aug. 31, 2024).

Why two numbers for each period? Well, one is the straight PCE price index, which covers all the surveyed prices. But the other is called the "core" PCE price index. And that's the same as the straight one except food and energy prices have been stripped out.

You are interested in the straight version. But markets, the Fed and economists prefer the core measure. That's because food and energy prices are exceptionally volatile, and removing them reveals the underlying trend.

Here's what MarketWatch says markets are expecting from tomorrow's data:

• August PCE index — Markets expect a fall to 0.1% from July's 0.2%
• YOY PCE index — Markets expect a fall to 2.3% from July's 2.5%
• August core PCE — Markets expect this to be unchanged from July's 0.2%
• YOY core PCE — Markets expect 2.7%, slightly up from July's 2.6%

Again, for mortgage rates to fall, we need tomorrow's actual figures to beat market expectations. And that means lower-than-expected numbers.

Higher-than-expected inflation numbers could push mortgage rates upward. But as-expected data (which the Veterans United analyst and we think is fairly likely) might leave those rates virtually unchanged.

We're also due a few tier-three reports tomorrow and one from tier-two. That's consumer sentiment in September. And it's expected to improve to 69.3 from 69.0.

Also tomorrow, Federal Reserve Governor Michelle Bowman has a speaking engagement.