Our daily 30yr fixed rate index struck 6.75% the other day. This matched the high from Might 19th and is the highest level given that late July 29, 2025. The key contributor to the recent spike has been the uptick in fuel rates in July combined with the reality that rates never ever made it any lower than 6.52% over the previous 2 months. In other words, we were already in a high range and the uptick in fuel prices just gave rates a push.
Heading into today, we knew there was prospective volatility associated with 2 events: Fed Chair Warsh’s congressional statement and the regular monthly release of the Consumer Cost Index (CPI)– a key inflation report.
The Warsh statement had extremely little effect, however CPI was a various story. It showed inflation can be found in much lower than expected in June. Lower inflation is typically good for rates. However the bond market is aware that July could end up being a various story, thus limiting the vitality of today’s rate healing with the rate index dropping only 0.05% to 6.70%.