| Economic data this week – The August reading of the Consumer Price Index (CPI) showed that consumer inflation continues to moderate. Consumer prices rose 2.5% from one year ago, down 0.4% from July’s annual level of 2.9%, and the lowest annual rate since February 2021. The CPI rate peaked at 9.1% in June of 2022 and has worked its way down gradually. The Produce Price Index (PPI) was also released this week. It showed that wholesale rose just 1.7% from last August. Unfortunately, core PPI, which excludes food and energy moved up 3.3% from one year ago. The difference between the PPI and the Core PPI was mainly attributed to lower energy costs as oil prices have dropped significantly from one year ago. Next week the Fed will drop their key interest rates for the first time in four years. It is widely believed that it will be a .25% drop, as a .5% drop so close to the election could have political implications.
The graph below shows the movement of the Consumer Price Index from 2021 to the present.
Stock markets – Stock market indexes made up last week’s losses to end the week up sharply. The Dow Jones Industrial Average closed the week at 41,393.78, up 2.6% from 40,345.42 last week. It is up 9.8% year-to-date. The S&P 500 closed the week at 5,626.78, up 4% from 5,408.42 last week. The S&P is up 18% year-to-date. The Nasdaq closed the week at 17,683.98, up 5.9% from 16,690.83 last week. It is up 17.8% year-to-date. U.S. Treasury bond yields dropped sharply this week – The 10-year treasury bond closed the week yielding 3.66%, down from 3.72% last week. The 30-year treasury bond yield ended the week at 3.98%, down from 4.03% last week. We watch bond yields because mortgage rates follow bond yields. Mortgage rates – Every Thursday Freddie Mac publishes interest rates based on a survey of mortgage lenders throughout the week. The Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products as of September 12, 2024, were as follows: The 30-year fixed mortgage rate was 6.2%, down from 6.35% last week. The 15-year fixed was 5.27%, down from 5.47% last week. The graph below shows the trajectory of mortgage rates over the past year
Freddie Mac was chartered by Congress in 1970 to keep money flowing to mortgage lenders in support of homeownership and rental housing. Their mandate is to provide liquidity, stability, and affordability to the U.S. Have a great weekend! |
News & Media
