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By G. Steven Bray
Mortgage rates stayed on the range last week, and chances are they won’t stray too far this week. The most important economic data is the consumer price index, which was released today. The headline number spiked, and if you’ve filled up recently, you probably know why. Gas prices are rising again. But markets generally are smart enough to look past the volatile components of the index, like gas and food. The core rate rose in line with expectations. While the core rate is just over the Fed’s stated inflation goal at 2.1%, it’s been stable for the last few months.
Maybe the more important event this week is the release of the minutes from the Fed’s Apr meeting. Markets seem convinced that in private the Fed has been conjuring up ways to raise interest rates. Based on recent comments from Fed governors, I suppose it’s possible, but Fed head Yellen’s comments the other day about negative interest rates make me think otherwise. My expectations are that nervousness about the minutes will cause some volatility, but rates will remain on the range a while longer.