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Mortgage Rate Winning Streak Comes to an End


Well, what we didn’t want to happen, happened.

We got a hotter-than-expected CPI report this morning, sending bond yields surging higher.

After three straight days of slightly-better mortgage rates, there was some real promise we could make a more meaningful move back toward the low-7s.

But alas, the 10-year yield is about 5 bps higher today, which should put the 30-year fixed back above 7.50% if it holds.

The semi-good news is the initial reaction to the report was a lot worse, with yields up over 10 bps, so perhaps it’s not as bad as it seems.

Hot CPI Report Puts a Stop to the Mortgage Rate Rally

Inflation rose to 3.7% in September, up from 3.4% in August, a bit higher than the 3.6% economists had expected.

A lot of it boiled down to higher gas prices, which jumped more than 9% last month and accounted for over half of the monthly increase.

The bond market has already priced that in for the most part, so it wasn’t what moved yields (and rates) today.

The problem was the core number, which strips out food and energy.

It also increased 0.3% on the month, above the 0.2% economists were expecting, pushing this YoY numbers to 2.7%, also above the 2.6% expected.

While it might not sound like much, it could signal that inflation is creeping in to other areas of the economy.

Remember, oil and gas touch just about everything, not just our gas prices.

Update: Despite starting a lot higher, bond yields actually fell on the day as bond buyers overlooked the hot inflation numbers. Mortgage rates may be lower on the day depending on the lender and possible midday repricing.

Shelter Inflation Piles More Bad News onto Housing

Within that core number we also saw shelter costs rise 0.4%, the fastest monthly pace in five months.

Shelter is one of the biggest components of CPI, and it had been slowing for more than three years, so this is yet another setback.

It’s feeling like 2023 again with mortgage rates well above what most existing homeowners have locked in.

High market mortgage rates relative to rate on existing loans keep homeowners locked into their properties, unable or unwilling to sell.

This keeps inventory low and housing costs elevated, spilling over into inflation, which ironically can keep mortgage rates higher as well!

At the same time, more people must continue renting because buying a home becomes too expensive.

That means they’re renewing leases, potentially at a higher monthly rate, and rental supply goes down, also putting upward pressure on rents.

Are Fed Rate Hikes Back on the Table?

In truth, they were never off the table really.

But now they might be on the table as soon as the October meeting in two week’s time.

The odds of a hike at the Fed’s October 27-28 meeting just about doubled after the report, climbing from 22% a day earlier to 42% this morning, per CME FedWatch.

The Fed already raised rates last month and has warned that more hikes could be needed if inflation doesn’t cooperate.

But they noted that they could be patient, and that the hikes might not be in consecutive meetings.

This report could change that if they feel it necessary to attack inflation more aggressively.

It’s also the last look at consumer prices before the all-important midterm elections, with inflation now outpacing wage growth for six months in a row.

Not exactly the data the President wanted to see, which if it had gone the other way could have been a positive talking point for Trump.

Is the Lower Mortgage Rate Trend Over Now?

I wouldn’t say it’s over, but this is certainly a setback.

As I said yesterday, I was hesitant to call it a downtrend, and today’s unwelcome news illustrates why.

We basically needed perfection on the data front to keep mortgage rates moving lower.

Instead we got a miss. We’ll get more data tomorrow with producer prices, retail sales, and jobless claims, so that could change things.

And the drop in yields after the initial surge is somewhat promising too.

The 10-year bond yield is only up about 4-5 bps this morning after being up as much as 15 bps or so.

In other words, there still might be that wall of resistance with bonds looking attractive to investors at current yields.

Of course, that doesn’t necessarily mean that mortgage rates drop from here. It just means they don’t push even higher well beyond their recent highs.

Read on: Compare different mortgage rates fast with my mortgage rate calculator.

Colin Robertson
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Move slow and make things: What Japanese craftsmanship can teach business



Matt Alt is a Tokyo-based writer who has spent two decades chronicling Japan’s relationship with craft and commerce. He is the author of Pure Invention: How Japan Made the Modern World. David Schonthal is a Kellogg professor who studies why the best ideas in business succeed, and why so many don’t. He is the co-author of the Wall Street Journal Best Selling Book, The Human Element: Overcoming the Resistance That Awaits New Ideas.

President Trump Sells Micron Stock and Buys Another Mega-Cap Artificial Intelligence (AI) Stock


A financial disclosure from the Office of Government Ethics shows that President Trump’s brokerage accounts executed over 500 trades in August. Those accounts are managed by third-party institutions, meaning Trump himself was not responsible for the decision to buy or sell any security.

However, the trades are still worth examining. In August, the president’s accounts sold Micron Technology (MU -5.63%), with net sales totaling $251,000 to $515,000. Meanwhile, the largest buy was Meta Platforms (META -3.72%), with net purchases totaling $5.1 million to $25.3 million.

Here’s what investors should know about these artificial intelligence stocks.

President Donald J. Trump stands at a podium during a White House press briefing. Image source: Official White House Photo by Andrea Hanks.

Micron Technology: The stock President Trump’s accounts sold in August

Micron manufactures memory and data storage solutions built on DRAM and NAND flash technology. CPUs store information on NAND (long-term memory) and use DRAM (working memory) to perform tasks. Also, GPUs use a specialized type of DRAM called high-bandwidth memory (HBM), which accelerates complex tasks like artificial intelligence by rapidly feeding data to processor cores.

Micron has benefited greatly from a critical supply shortage in memory chips fueled by the AI boom. However, the company ranks third in DRAM, HBM, and NAND market share after Samsung and SK Hynix, and it lacks a durable competitive advantage because memory chips are considered commodities, as wafers from different suppliers are interchangeable.

“We do not believe Micron has an economic moat,” wrote William Kerwin at Morningstar. “We view DRAM and NAND as commodity-like products prone to market supply/demand dynamics and steady pricing erosion.” However, Kerwin also thinks the AI boom will create a strong tailwind for the company in the medium term.

Micron reported strong financial results in the fourth quarter of fiscal 2026, which ended in September. Revenue increased 379% to $54 billion, driven by strong growth across every business segment. Non-GAAP net income soared to $33.42 per diluted share, an 11-fold increase from $3.03 per diluted share last year.

Micron should benefit as the AI build-out continues to drive demand for memory across GPUs, servers, and storage. Next year, the company expects volume production of its 512GB DDR5 DRAM server modules, which reduce operating power by 60% versus four 128GB modules. Micron also expects volume production of HBM4E, an enhanced version of the HBM4 memory it began shipping earlier this year.

So, why did President Trump’s accounts sell Micron in August? I can only guess, but one possibility is concern that memory prices — and Micron’s earnings — will decline when the supply shortage eases. The stock looks cheap today at 12 times earnings, but earnings have historically fallen sharply during industry downturns.

MU Micron Technology

$878.84-$52.40 (-5.63%)

NASDAQ · As of 4:00 PM ET 10/16/26

Meta Platforms: The stock President Trump’s accounts bought in August

Meta Platforms owns the three most popular social media networks in terms of monthly active users in Facebook, WhatsApp, and Instagram. The company uses consumer data generated by those platforms to recommend content and target ads, creating a network effect that makes its social media properties increasingly engaging.

Meta Platforms reported mixed second-quarter financial results, missing estimates on the bottom line due to severance and legal expenses. Revenue increased 28% to $60.8 billion, driven by an increase in advertising impressions and price per ad. But GAAP diluted earnings fell 13% to $6.18 per diluted share, partly due to higher spending related to legal proceedings and severance costs.

However, Meta’s AI spending — from custom silicon to proprietary models — is paying off, with increased ad impressions and prices. Also, the company recently introduced Muse, an AI agent that automates tasks for businesses and consumers. Morgan Stanley analysts believe Meta is uniquely positioned to be a winner in consumer AI agents due to its data.

So, why did Trump’s accounts buy Meta in August? One possibility is the relatively cheap valuation. The stock was down nearly 30% from its high in August because investors were worried about heavy spending on AI. Shares have since rebounded, but still look attractive at 27 times earnings, as Wall Street expects 20% annual earnings growth over the next three years.

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