They say that the bond market and interest rates are like the weather: talk about any of it all you want, there’s nothing you can do about either. And so, Orion focuses on our excellent service and our products, coming to you through our AEs. But interest rates do impact our brokers and your clients directly, and it is important to stay up on the news.

Our brokers should know that this week is a big week for economic events on the macroeconomic front, which could move rates higher or lower depending on the news. The Federal Reserve and the European Central Bank (ECB) are both scheduled to decide on interest rates and update on monetary policy. Both have to consider persistently inflation, which argues for continued rate increases, and also the bank news from recent months: how fragile, if at all, are U.S. community and regional banks? The consensus view is that the ECB will lift interest rates by a quarter point and the Federal Reserve will not make any changes to interest rates.

But that isn’t the only thing being watched this week. The Consumer Price Index report will be closely watched with the shadow of inflation hanging over the market. Economists forecast a 0.4% increase in core CPI (the “core” number does not include food or energy, which tend to be somewhat volatile) for May. This would match the level from April. Looking at the numbers for the year, Core CPI is seen being 5.3% in May in a slight moderation from the 5.5% pace in April as last April’s number drops off the calculation.

Headline CPI, which includes food and energy prices, is seen being up 4.1% in May. But we all have to eat, whether at home or in restaurants, and some things like egg prices have been coming down while others have been going up. The expectations seem to point to a soft 0.1 percent month-over-month increase for food prices reflecting an increase in food away from home that should be partially offset by another decline in food at home.

If there is a decline in prices of eating at home, it will be the third consecutive decrease in food at home prices as costs associated with groceries such as commodity prices, transportation, and storage continue to ease. But food away from home (e.g., restaurants, those tasty hot dogs while waiting in line at the convenience store) prices are tipped to continue to increase given high labor costs and still strong demand.

As noted above, regardless of what the Fed decides, or the direction of consumer inflation, Orion will continue to offer some very good products to help your home buyers and those of your clients who are refinancing, as well as the great customer service that we’ve come to be known for!

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