Market Commentary

Updated on March 12, 2025 10:04:28 AM EDT

Today's major economic news was the release of February's Consumer Price Index (CPI) at 8:30 AM ET. It revealed consumer inflation was not as strong as expected last month and over the past twelve months. The overall CPI rose 0.2%, as did the more important core data that excludes more volatile food and energy costs. Both monthly readings were expected to match, but were predicted to rise 0.3%. More good news came in the annual readings that were down from January's pace and fell short of estimates by 0.1%. This left the overall CPI up 2.8% year-over-year and the core reading up 3.1%. Last month's report for January showed annual consumer inflation was at a 3.0% rate and 3.3% respectively. Unfortunately, bond traders seem to be seeing negative data points somewhere in the release as this should have been taken as very good news for the bond market.

We also have the results of today's 10-year Treasury Note auction to watch. They will be announced at 1:00 PM ET, making this an early afternoon event for mortgage rates. Good news would be the results showing a strong demand for the securities. Considering the recent volatility in stocks, there is a decent possibility of the sale drawing plenty of interest from investors. If that ends up being the case, we should see a little strength in the broader bond market this afternoon, possibly leading to a small improvement in mortgage pricing. This scenario will repeat tomorrow when 30-year Bonds are sold.

Tomorrow has two pieces of relevant economic data, both set for release at 8:30 AM ET. The sister release of today's CPI is one of them. February's Producer Price Index measures inflationary pressures at the wholesale level of the economy compared to the consumer level. As with today's version, there are also two primary readings- the overall and the core data. Both are predicted to be up 0.3% for the month while modestly declining year-over-year. Stronger than expected readings would be bad news for mortgage rates.

Last week's unemployment figures will also be released early tomorrow. Predictions have them showing 226,000 new claims for jobless benefits were made, up from the previous week's 221,000 initial filings. Rising claims are a sign of weakness in the employment sector. Therefore, the larger the number, the better the news for mortgage pricing.