How Today's CPI Report Could Change Mortgage Rates

<p>October's CPI report came in hotter than expected, and the bond market reacted fast. Headline inflation rose 0.4% month over month against a 0.3% estimate, and core rose 0.3% against 0.2%. The 10-year Treasury yield jumped 12 basis points to 4.98% after trading above 5% for much of the day, the two-year rose 18 basis points to 4.74%, and the 30-year fixed mortgage rate climbed 12 basis points to 7.30%.</p><p>Realtor Cory Edge of Edge Realty and mortgage professional Dwight Millard of On Q Home Loans join Jon Sanchez to break it down. Dwight explains why rate improvements take weeks to earn and hours to lose: rates had fallen from 7.56% on September 28 to 7.18% before today. Jon covers two Fed speakers who rattled the bond market, CME FedWatch odds of a quarter-point hike in December (100%) and another in January (65%), and why he doesn't expect a half-point hike. Cory goes inside the CPI: shelter rose just 0.3% but carries about 30% of the index weight, while transportation services, beef, electricity, gasoline and baby formula, up 5.1% and the largest single component, drove the increase. Plus what buyers are doing heading into the holidays and why Dwight says rates need to get inside 6%.</p><p>Markets: the Dow fell 158 points to 52,231, the Nasdaq lost 188 points to 25,065, the S&amp;P 500 slipped 0.38% to 7,520, oil fell 79 cents to $86.11 and gold dropped $84.20 to $4,030.80.</p>