Inflation Updates and What’s Next for Rates
Get the latest on inflation, rate cuts, and what it means for you.
Join me in our ‘Weekly Market Update’ to decipher what to expect in the coming weeks & months.
Happy Friday! Brian Manning, with a weekly update.
First of all, I want to say thank you so much to everybody who came out to Fall Fiesta yesterday. It was an incredible success! We raised a lot of money for Trees, Water, & People. I want to thank everybody who donated. It was just so fun to see everybody come out and have an amazing time. We can’t thank T|aco enough, just one of the absolute best venues in Boulder. I want to say thank you so much to everybody who came out and made last night’s event such a success. It blows me away that we’ve been doing Fall Fiesta for 10 years now, and I just can’t thank everybody enough for their support.
Let’s talk about what happened this week. Monday this week was a quiet news day because it was Veterans Day. Markets were closed, so not a lot to talk about there.
Tuesday, this week, markets were quiet as well, because this Wednesday, we got CPI. CPI stands for the Consumer Price Index. This is a gauge of inflation. This is what’s looked at as far as what the cost of goods is doing. The headline number moved from 2.4% to 2.6% so we saw a little bit of an increase there. We also look at what’s called the core rate. The core rate strips out volatile items such as food and energy. The core rate remained unchanged at 3.3%. Inflation is important for us to look at, because inflation is the enemy of interest rates, and I think just for everybody to make note of this. It’s going to be hard for us to make any progress on inflation. When we look at the months ahead, the reading that we just got, also going into November’s reading and December’s reading, likely the next time we’re going to see any kind of meaningful progress on inflation will be January, and we don’t get that reading until February. The reason why is that when we look at what’s called the replacement values, we look at what inflation was a year ago, the numbers were really low. So, when you’re replacing really, really, really low numbers, it’s hard to make progress on inflation when you’re replacing those numbers. So, we’re probably not going to see much impact as far as inflation is concerned until February is reading unfortunately, it could mean a little bit of a rocky ride for interest rates between now and then, but it is what it is.
Thursday this week, was a quiet news day as well, and then today we had Jerome Powell speaking. I would say the tone for Jerome Powell’s speech today, and even all the other fed voting members that have been speaking as well, because we’ve heard from like four or five of them today, was that they are unsure if we were going to see a rate cut in December. They know that the general trend will be for rates to move lower, but they’re unsure what’s going to happen in December. I think they’re just kind of opening the door right now to keep their options open to wait and see how December goes. I’m on the fence. I’m not sure what’s going to happen in December. We must wait and see what the data points are that come out between now and then. The tone is lower rates on the way, but perhaps in December, we will not see that rate cut.
I’m around all weekend. If you have any questions, let me know I’m available seven days a week, from 8 am to 8 pm if you want to learn how we’re closing purchase transactions in 10 days from start to finish, give me a call.
Happy Friday. I hope you have a great day!
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