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Mortgage rates stay vulnerable as hawkish Fed talk meets inflation week

A 0.2% month-to-month threshold for core inflation is cited as a key line for whether the Fed would need to respond, with conflict risk adding upward pressure to the 10-year yield.

Reported · Written up by our desk · Mortgages

HousingWire says mortgage rates remain vulnerable during the current inflation week as markets weigh hawkish Fed messaging focused on monthly core inflation, even after oil prices have fallen sharply.

The outlet highlights that Fed discussion has centered on core inflation rather than headline inflation, with a cited benchmark of 0.2% month-to-month core inflation as the level seen as acceptable, while anything above would require a policy response.

HousingWire also links conflict uncertainty to higher Treasury yields, noting the Iran conflict has contributed to a higher 10-year yield that can feed through to mortgage rate pricing.

While the piece points out some Fed hawks have argued lower oil could still be inflationary by boosting demand, it concludes that what matters most for near-term rate expectations is the monthly core inflation path and the market’s reaction around it.

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