Finances

U.S. Treasury yields dipped early in the week as investors reacted to the release of monthly producer prices which indicated a potential cooling of inflation. Yields moved lower later in the week as jobless claims remained low.

On Tuesday, the Bureau of Labor Statistics released March’s producer price index (PPI), which measures the average change over time in the prices of goods and services. The March PPI grew 0.5%, below economists’ estimates of 1.1%. Year-over-year, the increase in wholesale prices reached 4%, well above the Federal Reserve’s 2% target.

"Net, net, producers are still reporting above-normal price increases, which will put upward pressure on inflation the consumer is already seeing," said chief economist at FWDBONDS, Chris Rupkey. "The only good thing is that producer price inflation was perhaps not as bad as feared given March is the first full month since the Iran war began."

The benchmark 10-year Treasury note yield opened the week of April 13 at 4.34% and traded as high as 4.32% on Thursday. The 30-year Treasury bond opened the week at 4.92% and traded as high as 4.95% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 11,000 to 207,000 for the week ending April 11, lower than economists’ expectations of 215,000 claims. Continuing claims increased by 31,000 to 1.82 million.

"At some point, elevated energy costs and prices for materials will cause firms to lay off marginal workers to protect profit margins," said chief economist at High Frequency Economics, Carl Weinberg. "Just keep in mind that in the 1973 oil shock, it took about three months for claims to start to rise in any meaningful way."

The 10-year Treasury note yield finished the week of 4/13 at 4.25% while the 30-year Treasury note yield finished the week at 4.91%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, April 16. The survey showed mortgage rates decreasing for the second consecutive week.

This week, the 30-year fixed rate mortgage averaged 6.30%, down from last week’s average of 6.37%. Last year at this time, the 30-year fixed rate mortgage averaged 6.83%.

The 15-year fixed rate mortgage averaged 5.65% this week, down from last week’s 5.74%. During the same week last year, the 15-year fixed rate mortgage averaged 6.03%.

“Mortgage rates declined this week to a four-week low of 6.30%,” said chief economist at Freddie Mac, Sam Khater. “Compared to one year ago when rates were at 6.83%, this is a meaningful improvement for homebuyers during what is typically the busy spring homebuying season.”

Based on published national averages, the savings rate was 0.39% as of 3/16. The one-year CD averaged 1.52%.

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