July PCE landed Wednesday morning hot enough on the headline to end the week's bond rally, without being hot enough to change anyone's arithmetic about September. The Bureau of Economic Analysis put the headline PCE price index up 0.2% on the month and 3.7% year over year, a tenth above forecast on both lines. Core was on target at 0.2% monthly and 3.3% annually, though Mortgage News Daily flagged that the unrounded core print was 0.246% — close enough to rounding up that traders treated it as the wrong kind of "in line." Ten-year yields had been sitting near Tuesday's lows going into the 8:30 release and finished the session at 4.665% after several bounces off a 4.67% ceiling, while the UMBS 30-year 5.5 coupon gave back 0.13 to 99.41. Crude adding roughly three dollars between 5am and noon Eastern did not help. Bankrate's 30-year conventional prints 6.73% this morning against 6.70% yesterday.
Yesterday's brief led with Treasury at least doubling its long-end buyback operations from September 9 and a five-basis-point drop driven by Iran negotiation headlines. Both held for exactly one session. The buyback change is still a real technical positive for the long end and it has not gone anywhere, but a hot headline inflation print outranked it inside twenty-four hours, which is the useful lesson for anyone who was about to tell a borrower the rally had legs.
The timing is what makes this week worth watching rather than just reading. The Jackson Hole symposium opened today and runs through Saturday, and Chair Kevin Warsh delivers his first keynote there as Chair on Friday morning, on a program themed around financial innovation in payments and policy. Boston Fed President Susan Collins said Tuesday that the central bank will need to raise rates soon unless inflation shows a continued decline. Put a 3.7% headline print, a Fed official openly discussing hikes, and a new Chair's first Jackson Hole address in the same week, and the asymmetry this week points up, not down. The next FOMC meeting is September 15-16 and it carries a Summary of Economic Projections, so Friday's tone is the market's best read on that dot plot until the meeting itself.
For pricing, today's 6.73% is three basis points above yesterday, two below last week, and seven above a month ago — call it stable in the high 6.7s rather than moving in either direction. The 30-day Bankrate band is 6.67% to 6.82% with an average of 6.74%, so today sits fractionally under its own monthly average; the 90-day band runs 6.47% to 6.82% against an average of 6.65%, which puts today a solid 26 basis points above the quarter's best level. The MBA's own survey had the conforming 30-year at 6.78% for the week ending August 21, a three-week high, with its composite index down 1%, refinances down 2%, and purchase volume running 5% below last year. There is no float case into a Friday keynote from a new Chair with a 3.7% headline behind it. On the demand side, Redfin's four weeks ending August 23 show new listings at their highest level since April and total inventory up 0.5% while buyer demand slipped, which is real negotiating leverage for a purchase borrower who has been waiting for a reason to move.
On the industry desk: DOJ and FBI disrupted a hacker network used to breach the Federal Reserve and other critical infrastructure, and Chrisman's commentary reports roughly 103 bank regulators' e-mail accounts were intercepted for more than a year — worth a conversation with whoever owns vendor security at your shop, because the warning is aimed at lenders. Arizona has taken legal action against MV Realty, a move ALTA and AARP both backed publicly, so any file carrying a long-term listing agreement lien deserves a title review now rather than at closing. NAHB puts building material costs up 6.7%, which lands hardest on small builders and shows up in your world as slipping new-construction closing dates. HousingWire made the case that property taxes are the affordability variable nobody prices into the conversation, which is a fair point on a payment where escrow can move more than the note rate does. And a second attempt to remove Fed Governor Lisa Cook is pending, with Cook denying intentional wrongdoing; for pricing purposes, Board composition matters only as a term-premium input.
pull every in-flight file with a lock expiring inside 30 days and lock the ones you can before Friday's 10am keynote — this is a week where the risk of waiting is priced above the reward.