U.S. Inflation Eases in June: Good News for Canadian Mortgage Shoppers CA
U.S. Financial Markets Boost
U.S. financial markets received a boost today with a lower-than-expected inflation reading, marking the lowest level since May 2020.
June Inflation Trends
Headline inflation fell by 0.1% month-over-month, while core inflation, excluding food and energy prices, rose just 0.1%. On an annual basis, headline and core inflation were at 3% and 3.3%, respectively.
U.S. financial markets received a boost today with a lower-than-expected inflation reading, marking the lowest level since May 2020.
June Inflation Trends
Headline inflation fell by 0.1% month-over-month, while core inflation, excluding food and energy prices, rose just 0.1%. On an annual basis, headline and core inflation were at 3% and 3.3%, respectively.
Economists at ING commented that the soft inflation report boosts confidence that inflation is on track to meet the Federal Reserve’s 2% target.
Why This Matters for Canadian Mortgage Borrowers
Easing U.S. inflation can lead to lower interest rates, potentially benefiting Canadian mortgage rates. As U.S. inflation impacts the U.S. 10-year Treasury yield, which closely follows the 5-year Government of Canada bond yield, Canadian mortgage rates may drop as a result.
Following the U.S. inflation report, Canada’s 5-year bond yield dropped sharply, prompting some mortgage lenders to lower their rates.
Easing U.S. inflation can lead to lower interest rates, potentially benefiting Canadian mortgage rates. As U.S. inflation impacts the U.S. 10-year Treasury yield, which closely follows the 5-year Government of Canada bond yield, Canadian mortgage rates may drop as a result.
Following the U.S. inflation report, Canada’s 5-year bond yield dropped sharply, prompting some mortgage lenders to lower their rates.
Future Rate Cuts
Today's report increases the likelihood of a Federal Reserve rate cut in September. Analysts believe the better-than-expected inflation reading opens the door wide for a potential rate cut, contributing to a downward trend in consumer inflation.
Alexander Gasenko - your trusted Toronto & GTA mortgage broker. Dominion Lending Centres Maple Mortgage Group Independently Owned & Operated — FSRA# 13415
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