Mortgage rates tick to 6.75% after hot PCE as Jackson Hole opens

The official national 30-year fixed closed Wednesday at 6.75%, up 0.01 from Tuesday's 6.74%. That gives back a sliver of Tuesday's oil-led drop after July PCE stayed hot. Thursday's index is not out until about 4 p.m. ET. Early Thursday, bonds are little changed and Mortgage News Daily's trend is "moved down slightly," which points to a small rate impact if it holds.

Did mortgage rates go up on Wednesday?

Barely. Mortgage News Daily's daily index as of August 26:

• 30-year fixed: 6.75% (+0.01)
• 15-year fixed: 6.32% (+0.01)
• 30-year jumbo: 6.88% (unchanged)
• 7/6 ARM: 6.31% (+0.01)
• 30-year FHA: 6.33% (+0.01)
• 30-year VA: 6.35% (+0.01)

Freddie Mac's weekly 30-year is still 6.65%. The MBA weekly (August 19) is 6.77%. The 30-year remains below its 52-week high of 6.85%.

This week so far: 6.78 Monday, 6.74 Tuesday, 6.75 Wednesday. Tuesday was the clean drop. Wednesday was a hold dressed up as a one-tick worse print.

Mortgage News Daily's Wednesday wrap said the day depended on when you looked. Tuesday afternoon bonds were stronger, so some lenders already had better sheets. Versus that window, Wednesday was a bit worse. Versus Tuesday morning, it was a bit better. Bonds then lost ground after the morning lock window, which is why the official index closed 0.01 higher.

Individual lender quotes differ from a national index. A locked rate is not a closed loan.

What did Wednesday's PCE do to the 10-year?

July headline PCE rose 3.7% year over year, unchanged from June and hotter than the 3.6% forecast. Month over month it rose 0.2% versus 0.1% expected. Core PCE held at 3.3% year over year, right on consensus. Both are still well above 2%.

The 10-year Treasury CMT closed Wednesday at 4.66%, up 2 basis points from Tuesday's 4.64%. That is still below Monday's 4.70% and last Friday's 4.74%. Tuesday's oil-and-yield dip did most of the work. PCE only clawed a little of it back.

What did this morning's claims show?

Initial jobless claims for the week ending August 22 fell to 203,000, down 4,000 from a prior week revised up to 207,000. The survey was about 208,000. The four-week average rose to 205,500.

That is a soft miss versus the forecast, not a labor-market break. Claims are still near the low end of this year's range. A print this low does not give the 10-year a reason to fall on its own.

The 10-year is little changed this morning near 4.66%. Kansas City Fed manufacturing is due at 3:00 p.m. ET. That is after most lenders have already set the day's first sheets.

What should buyers watch at Jackson Hole?

The Kansas City Fed symposium opens today and runs through Saturday. The headline is Friday. Fed Chair Kevin Warsh's keynote is expected around 10 a.m. ET.

Fixed mortgage rates follow the 10-year more than the fed funds rate. Markets will parse how Warsh talks about inflation still stuck in the mid-3s and about the path of policy, not just whether September stays on hold. A clear pledge to get PCE back to 2% can keep long yields firm. A softer tone is the first real chance this week for another dip after Tuesday's oil move.

What does this mean if you are buying or refinancing?

Wednesday took back a sliver of Tuesday's 6.74% dip. If a payment already works at 6.75%, locking takes that print off the table before Friday's speech. Waiting is a bet that Jackson Hole helps the 10-year.

Run a payment estimate, then look at purchase or refinance options. See when refinancing beats waiting.

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