The Cost of Living Index Increases; Mortgage Rates Increase, Too.
The Consumer Price Index came in higher than expected this morning, registering a 0.371% increase. Excluding volatile gas and food prices, CPI grew by 0.241%. The latter figure is called “Core CPI”.
CPI is sometimes referred to as the “Cost of Living Index” because it measures how consumers are impacting by changing prices of energy, housing, transportation, food and beverage, apparel, entertainment and medical services.
When CPI moves higher, it generally “weakens” the value of a dollar because that dollar buys less. This is an inflationary cycle and generally leads to higher mortgage rates.
While both CPI figures are slightly higher than expectations, markets are taking the news in stride. Mortgage rates are only slightly off their best levels of the week, mostly on Friday-related profit-taking.