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This morning’s PCE inflation report, the Fed’s preferred measure of inflation, didn’t create much reaction in the bond market or for mortgage rates. While PCE is important for tracking overall inflation progress, it comes with a lag. Today’s numbers were for August, and we already saw the more timely CPI and PPI inflation reports two weeks ago. Those earlier reports usually give a good hint of what PCE will show, so surprises are rare.

As expected, the report showed:

• Core PCE (inflation without food and energy) came in right on target.
• “Supercore” PCE (a category that strips out housing and looks just at services) ticked slightly higher than the prior month.

Because the results were mostly in line with forecasts, bond prices didn’t rise, which means mortgage rates stayed fairly steady. The elevated “supercore” reading is a reminder that some areas of inflation are still sticky, which keeps markets cautious.

What this means for homebuyers:
Mortgage rates are holding steady for now. The bigger drivers ahead will be next week’s jobs report and future inflation readings. For today, the market is essentially waiting for fresher, more forward-looking data before making its next move.

This morning brought a batch of economic reports, jobless claims, durable goods orders, and GDP and all of them came in stronger than expected. While none of these reports individually would usually shake markets in a big way, when they all point in the same direction, the impact adds up.

Here’s what that means:

• Stronger economic data suggests the economy is holding up well.
• A strong economy usually shifts money into stocks and away from bonds.
• When demand for bonds falls, bond prices drop, and mortgage rates tend to rise.

That’s exactly what happened today. Bond prices slipped after the reports, which puts some upward pressure on rates. The move hasn’t been extreme, but it does show how even smaller reports can work together to influence mortgage markets.

What this means for homebuyers:
Rates may feel a little pressure upward in the short term, but the bigger movers are still the major inflation and jobs reports. For now, markets are watching to see if this strength is part of a bigger trend or just a short-term bump.

Compared to yesterday’s lineup of Fed comments and economic reports, today’s calendar is very quiet. The only scheduled monthly report was New Home Sales, but that data rarely has much effect on the bond market and today is no different.

That leaves the main event for markets: a 5-year Treasury bond auction happening this afternoon. While this might sound far removed from housing, it can directly influence mortgage rates. Here’s why:

* Investors buy Treasury bonds as a safe place to put money.
* Mortgage bonds compete with Treasuries for those same investors.
* If demand for Treasuries is strong, bond prices in general tend to rise, which pushes mortgage rates down.
* If demand is weak, prices can fall, and rates may drift higher.

In simple terms, today’s auction gives investors a chance to signal how much appetite they have for U.S. bonds, and that could nudge mortgage rates slightly in either direction.

What this means for homebuyers:
Don’t expect major swings today, but smaller shifts in rates are possible depending on how the auction plays out. The bigger movers for mortgage rates will still come from upcoming jobs and inflation data.

Today, Fed Chair Jerome Powell is speaking at a chamber of commerce luncheon in Providence. While it’s not a formal Fed meeting, markets always pay close attention when Powell talks—especially when there’s a chance for him to take audience questions.

Why does this matter for mortgage rates? Powell’s comments often shape how investors see the Fed’s next moves. Sometimes, after a press conference that sounded tough on inflation, Powell has used these smaller events to strike a more balanced tone. Other times, he has doubled down on the need to fight inflation more aggressively.

Right now, markets are looking for clues. The recent S&P business activity report (PMI) didn’t give investors much new information, so Powell’s Q&A is the day’s biggest potential market mover. If he signals confidence that inflation is cooling, bond prices could rise and mortgage rates may ease. But if he emphasizes concerns about inflation staying high, bond prices could fall and rates may edge higher.

What this means for homebuyers:
Mortgage rates can shift quickly based on what Powell says, even outside of official Fed meetings. If you’re planning to buy a home soon, today’s speech could add some short-term movement in rates. The bigger picture will still depend on upcoming jobs and inflation data, but Powell’s words today are worth watching.

This week includes the release of the PCE inflation report for August, which is one of the Fed’s preferred measures of inflation. But even though it’s an important report, it usually doesn’t shake the markets as much as the Consumer Price Index (CPI) because it comes later in the month and is easier to predict.

Right now, the bigger story for mortgage rates is jobs data. The Fed and financial markets are paying close attention to signs of strength or weakness in the labor market because that will play a big role in shaping the path for rates moving forward. In other words, the market is essentially in “wait-and-see” mode until next week’s jobs report is released.

In the meantime, the spotlight is on a wave of Fed officials giving speeches throughout the week. While these comments won’t change the overall picture on their own, they could cause smaller swings in bond markets and mortgage rates, especially if officials try to reinforce or soften the tone from Fed Chair Powell’s recent press conference.

What this means for homebuyers:
Mortgage rates are likely to move in a relatively narrow range this week, with only modest changes day to day. The bigger shifts will likely come next week when the latest jobs report is released. If the report shows the job market is slowing, bond prices could rise and mortgage rates could ease. If the data shows stronger hiring, bond prices may fall and mortgage rates could tick up.

The Week Ahead

Here are the key events to watch in the coming days and how they could affect mortgage rates:

Thursday – Weekly Jobless Claims
This report shows how many people are filing for unemployment benefits. If claims move higher, it signals weakness in the job market, which often pushes bond prices up and helps rates come down. Fewer claims signal a stronger job market, which can push bond prices down and cause rates to rise.

Friday – PCE Inflation Report (August)
This is one of the most important inflation measures watched by policymakers. If prices are rising faster than expected, bond markets usually react by selling off, which makes mortgage rates move higher. If inflation is cooler than expected, bonds tend to rally and rates often drop.

Next Week – September Jobs Report (Preview)
While not due until next week, markets are already positioning for it. A weaker jobs report would suggest the economy is slowing, likely pushing bond prices higher and bringing rates down. A stronger report would have the opposite effect.

If you’ve been watching mortgage rates since last week’s Fed meeting, you may have noticed some movement that feels a little unsettling. But here’s the good news: things aren’t nearly as bad as they may seem.

Even with the recent bump higher, 10-year Treasury yields, closely tied to mortgage rates are still at some of their lowest levels since April. Mortgage rates themselves remain near their lowest point since last October. In fact, rates are still lower than they were right before this month’s jobs report, when they had already dropped to an 11-month low.

What’s happening now is mostly a natural market adjustment after investors positioned aggressively ahead of the Fed’s announcement. It feels like a quick swing, but in the bigger picture, rates are still holding at relatively favorable levels.

What this means for homebuyers:
Mortgage rates remain much lower than they’ve been for most of the past year. The real test will come in early October when new economic data is released. If the data shows slowing growth or softer inflation, bond prices could rise and mortgage rates could ease further. On the other hand, stronger-than-expected reports could put some upward pressure on rates.