Let's address the inflation situation first, then we can move along to the MBA.
Inflation: Wow. What a week.
Before we even hit the reports this week, we had Cleveland Fed's Beth Hammack say on the 12th that she sees inflation pressures as relatively broad-based rather than concentrated in one component (energy). That kind of kills the theory some posit of "well, it's really just energy".
Linking to last week's post, one Goldman Sachs study ventures that .5% of the inflation we're seeing is caused by AI investments alone.
Both of these came before this week's CPI/PPI reports, so... fun.
CPI: Re-accelerated! .6% MoM, and up to 3.7% YoY. Core was above consensus at .3%. Energy was all the way up to 5.2%< and gasoline at 9.1%. Whew!
PPI: Similar whew! 1.3% versus the consensus of .5%, nearly triple! 6.3% YoY, and energy at 10.8% MoM and gasoline 20.3%. Ouch.
Those put our inflationary readings back to 2022 highs, and considering the Fed commentary BEFORE those were released, we're in for some fun for rate hikes. The Beige Book showed 9 of 12 districts reporting growth, and 4 districts said the pace is increasing.
Rates still saw a reprieve as stocks and AI turbulence had people move towards bonds. Some are calling this a change in direction, I think it's a short pause.
MBA: Fannie reported 5.4 million loans done with appraisal alternatives, useful information as we see UAD 3.6 go live. Freddie reported the same with their ACE+PDR options. Both reported about 30K loans with AOL or title acceptance in their pilot with no big problems so far.
Freddie announced automated income calculations upfront, going for 6 months with select lenders. Fannie reported a new occupancy misrep detection tool in DU. Perhaps from their Palantir partnership>?
Lastly, MBA updated their forecast to a 5% decrease for a <$2T forecast for our industry next year, and rates remaining above 7%.
Congrats to the new MBA Chairman, and all around good guy, Owen Lee, from Success Mortgage Partners.