Consumer prices have increased since June, with shelter costs contributing to a 0.2% month-over-month rise. The uptick indicates that companies may start passing on tariff costs to consumers. The Federal Reserve will closely monitor this trend as it may influence their policy decisions. Although a September rate cut is still a possibility, uncertainty regarding inflation signals encourages a cautious approach. The geopolitical landscape, including recent tariff pauses, complicates predictions about mortgage rates, impacting market expectations and decisions.
Consumer prices accelerated from June, influenced by rising shelter costs and indications that companies might pass tariff-related costs to consumers. This situation attracts scrutiny from the Federal Reserve as they evaluate monetary policy.
Melissa Cohn mentioned that the delays in implementing global tariffs could hinder the mortgage market long term, asserting that expectations of declining rates are thwarted by ongoing geopolitical and fiscal uncertainties.
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