Tame CPI Report is Good for Interest Rates

On Friday, the Bureau of Labor Statistics (BLS) published the Consumer Price Index (CPI) report. Although the government is in a shutdown, the BLS brought back some staff to finalize and release the report. The CPI exception occurred because federal law requires the CPI to be published to support the Social Security Administration’s annual cost-of-living adjustment (COLA) calculation for benefits, which must be announced by November 1 and take effect in January 2026.

 The tame CPI numbers paved the way for another Fed rate cut this Wednesday. Market participants were concerned that the Fed could pause while the US government shutdown continues and data delayed. While this potential Fed rate cut has most likely already been factored into mortgage rates, which have come down by about a percent over the last couple of months, it does help put downward pressure on rates over time and possibly lead to additional rate cuts in the future. But don’t count on it! This is a very unusual and uncertain rate environment.

Troy, Patrick, and I had a great time at our semi-annual Homebuying 101 last week. The main takeaway was that this is actually a great time to buy in the DC area, especially DC itself. We have seen a shift in many areas toward a buyer’s market, so contact us if you or anyone you know might be interested in reviewing numbers and options.