Economic Update - Mortgage Data and Expectations Tomorrow
Stocks are higher slightly today as investors await the release of the latest inflation data tomorrow. The report is expected to show that consumer prices grew at an annual rate of 6.5%, down from 7.1% the previous month.

As of now, the CME Group projects a 77% chance that the Fed raises rates by 25 bps at the FOMC meeting that begins at the end of this month. However, a disappointing reading tomorrow could increase the likelihood of another 50-point increase at the meeting.

For economic data today, MBA mortgage applications increased 1.2% last week behind a jump in refinance applications. Applications to refinance a home increased by 5%, while purchases applications were down 1%, reaching lows from 2014. The report also showed that the average interest rate of a conforming 30-year mortgage fell to 6.42%.

Treasury yields are lower, with the 2-year T yield down 0.7 basis points to 4.25%, the 5-year T yield down 4.5 basis points to 3.69%, and the 10-year T yield down 4.8 basis points to 3.57%. Advance rates are slightly lower throughout most of the curve.
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