July inflation stays elevated as income and orders strengthen
July inflation stayed above the Federal Reserve's goal as income rose, durable-goods orders strengthened, and second-quarter real GDP held at a 1.5% annualized pace. Treasury yields fell Tuesday, while technology earnings remain in focus.
Both headline and core PCE remained above the Fed's 2% goal in July.
Consumer spending was revised higher and durable-goods orders advanced in July.
The morning story in one minute
The Bureau of Economic Analysis reported that July headline PCE prices rose 3.7% and core PCE prices rose 3.3% from a year earlier. Personal income increased 0.4%, disposable income rose 0.5%, and consumer spending increased 0.2%. Real spending was nearly unchanged.
The second estimate left second-quarter real GDP growth at a 1.5% annualized pace. Consumer spending was revised higher. Separately, the Census Bureau reported a 1.1% rise in July durable-goods orders, with orders excluding transportation up 0.4%.
Where mortgage-rate observations sit
The published Conventional observation is 6.750% with a 6.925% APR, compared with 6.750% and a 6.913% APR on August 18.
The FHA observation is 6.375% with a 7.079% APR, compared with 6.375% and 7.054% one week earlier. The VA observation is 6.250% with a 6.540% APR, compared with 6.250% and 6.536% one week earlier. The current conventional index is 6.74%, within its 5.99% to 6.85% 52-week range.
Why this week is consequential for housing
The 10-year Treasury closed Tuesday at 4.64%, down from 4.70% on Monday.
The combination of firmer income, sticky inflation, and stronger equipment shipments keeps both inflation persistence and business demand relevant to the rate outlook.
What the market reporting adds
CNBC's Rick Santelli described the durable-goods result as "powerful" and linked the initial yield move to stronger income and orders. Steve Liesman said the Treasury program was largely a market non-event and framed the Fed as likely to watch incoming data.
Jason Furman argued that underlying inflation may be nearer 2.5%, while emphasizing that growth, income, and labor conditions remain firm. Those interpretations are broadcast analysis, not official measurements. Nvidia reports after today's close.
Three things worth knowing
The published Conventional observation is 6.750% with a 6.925% APR, compared with 6.750% and a 6.913% APR on August 18.
The 10-year Treasury closed Tuesday at 4.64%, down from 4.70% on Monday.
What this means for buyers and professionals
The morning data do not point in one direction: inflation remains elevated, while income, consumption revisions, and capital-goods shipments show continued demand. Published national observations are context only, and individual mortgage pricing depends on the complete transaction and market timing.
Why can the rate backdrop stay volatile?
Inflation remains elevated while income, consumption, and capital-goods shipments show continued demand. Treasury yields, mortgage-backed securities, and lender execution can respond differently as markets reassess each release.
What were the latest observations?
The published observations were 6.750% with a 6.925% APR Conventional, 6.375% with a 7.079% APR FHA, and 6.250% with a 6.540% APR VA. The official August 25 Treasury closes were 4.64% at 10 years and 5.17% at 30 years.
What remains unknown
How markets respond to Nvidia's results, Jackson Hole remarks, and the next official releases remains unknown. Market conditions can change after publication.
What would be useful next?
Keep learning, ask about a real situation, or take the next step when it fits. The relationship comes first.