After a cooler than expected inflation Report was announced on Tuesday mortgage Rates absolutely tumbled the Consumer Price Index or the CPI inflation report Uh came in below estimates regarding Inflation on a month-to-month basis as Well as compared to one year ago now After this report was announced another Rate hike by the FED has been virtually Wiped out and is completely off the Table by most estimates so in today's Video I'm actually going to share all The details so let me first share what Happened regarding this inflation report Which again came in below uh the Forecast here so core CPI on a Month-to-month basis uh only increased By. 2% that was below estimates of a Gain of 3% and also below uh September's Gains of. 3% uh core uh CPI looks at Consumer prices excluding volatile Energy and food prices meanwhile core CPI on a year-over-year basis uh Increased by 4% compared to the forecast And also compared to September's reading Of 4.1% um headline CPI including food and Energy uh actually came in at 3.2 below The estimate of 3.3 and also below uh September's reading at 3.7% headline CPI I compared to September was uh virtually flat um below Estimates of a gain of 0.1% and also Below September's reading a gain of
0.4% so because of this cooler than Expected inflation report here uh bond Yields decrease big time so the 10-year Uh us treasury note decreased by nearly 18 basis points to 4.45% uh that's a big decrease because According to the mortgage News Daily That actually sparked one the the Biggest single day bond market rallies Since late last year so what happened When the bond market rallies that means Um prices for those bonds increases and Of course because there's an inverse Relationship between prices and yields Uh because bond prices increase yields Decrease greatly as well and because of This look at this 7.40% according to the U mortgage News Daily that's a decrease of 18 basis Points compared to yesterday and also For a 15-year we're at 6.88% uh Jima loan is at 7.80% and FHA and VA loans is around 6.75% now look at this volatility Because on Monday rates increased 7.58% that was on Monday the highest Raing since November 1st so more or less A 2 two we high on Monday that got Completely reversed on Tuesday Decreasing to 7.40% the lowest reading since November 3rd this year also when looking at rates One year ago we were at 6.65% that's an increase of 75% points
Or an increase of 75 basis points Compared to 12 months ago so not only Did rates decrease by 18 basis points uh On Tuesday here we're also well below The peak of around 8% that we saw in uh Mid October uh to the end of October so Rates have more or less uh decreased by About 60 basis points over the past two Weeks alone now remember when I said That another rate hike by the FED has Been virtually been wiped off it's Basically off the table here so the next Move by the FED should be a Fed pivot in Which they decrease rates sometime next Year now look at this this is the uh CME Fed watch tool the next meeting by the FED is actually in 28 days uh from the Time I filmed this video which is on December 13th so by a uh 99.8% probability the FED is going to Pause uh any rate hikes in their next Meeting here that is quite a bit Different compared to just one day ago Before this inflation report was Announced because one day ago the uh Odds of a Fed pause was at 85.5% also yesterday it was in odds of 14.5% that the Fed was going to increase Rates another 25 basis points from 5.5 To 5.75% but it went from 14.5% to 2% on Tuesday this is also Quite a bit different compared to 1 Month ago when 1 month ago there was was
A 28.8% chance that the Fed was going to Increase rates by 25 basis points now It's virtually zero uh to be exact. 2% Right now so when looking ahead in 2024 the big question is not when the FED will increase rates but when will The FED pivot and also start decreasing Rates so we have to actually go until May 1st 2024 to get to a higher chance of a Fed Pivot here so uh um back then there's Only a 32% chance that the FED will Decrease rates by 25 basis points Looking at June 12th though uh there is A 57.6% chance that the FED will decrease Rates from 5.5 to 5.25% then a 37% chance that the FED Will decrease rates to 5% so big picture Here based on this uh forecast here it It appears that we're at Peak levels for Interest rates by the FED of course a Luck of change though so let's have a Look at what's uh what's ahead uh this Week so this week uh we have of course On Tuesday of course we had the CPI but Then on Wednesday when I post this video Um I will have a look at uh core retail Sales um for the month of October and Also core uh PPI that's a producer price Index that is uh the increases or Decreases in prices that producers um Pay for whereas on Tuesday that was
Based on what consumers are paying the C And Consumer Price Index um has to do of Course consumers um so on Wednesday uh We'll have a look at what producers are Paying and that is again a uh a key Measure of inflation that the FED Actually tracks then on Thursday we'll Have a look at um continuing jobless Claims and also initial jobless claims As well then on Friday we'll have a look At you know unrelated to inflation I Look at construction numbers on a National level looking at permits and Also housing starts as well in other News on Thursday we'll have a look at um Home prices and home sales in California For existing houses for the month of October that's announced on November 16th so I'll make a video and post that Later this week on top that next week Which is actually on November 21st which Is next Tuesday we'll have a look at October existing home sales and home Prices according to the National Association Realtors and of course I'll Definitely make a video regarding that As well and share my own analysis of Their data like I do each and every Month with that said thank you so much For watching today's video also if you Guys got any value as this video Whatsoever then please hit the like Button I great appreciate that of course I appreciate you also check out that
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