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Jackson Hole and core PCE set the stage for mortgage-rate expectations
Core PCE due Wednesday is expected at 0.2% to 0.3% for the month, with the Fed also weighing earlier CPI and PPI readings.
Redfin News said markets are leaning on central bank signals again as a lack of fresh economic data leaves mortgage rate expectations more sensitive to geopolitics and Federal Reserve messaging, with attention focused on Chair Warsh’s Jackson Hole address.
The outlet noted that the Fed’s Jackson Hole speech has historically moved 10-year Treasury yields lower, with Redfin citing that in the last two years yields fell by about 10 bps after the chair’s customary address, while JPMorgan estimates an average effect of 5.5 bps over the last 25 years.
Redfin also pointed out that Warsh has avoided forward guidance so far, and there is no clear indication he will change course on Friday, even though markets may still react based on interpretation rather than new policy direction.
Looking ahead, the report said Wednesday’s core PCE, the inflation gauge the Fed uses, is anticipated to land between 0.2% and 0.3%, and that differences around the release could largely be explained by technical factors like category weighting and seasonal adjustment rather than a fundamentally different inflation picture.