Here is the month-over-month percentage change in the consumer price index.

Jan > +0.6%
Feb > +0.1%
Mar > +0.25%
Apr >+0.6%
May >+0.5
June >+0.2%
July >+0.4%
Aug > +0.1%
Sept > -0.5%
Oct > -0.4%
Nov > 0.0%
Dec > +0.2%
Jan > +0.1%

Source: Bureau of Labor Statistics

During the Jan. 30-31 Fed meeting the powers that be decided to keep the key fed funds rate unchanged at 5.25%. However, if the current rate of inflation continues on this upward trajectory then the Fed board might just raise the key rate a quarter to a half of a percentage point to keep inflation within the slow rising, manageable amount of roughly 2-3% per year.

Many important numbers are left out of the inflation rate, so it must be “taken with a grain of salt” but if perception is reality then the reality is that our inflation rate is moving a little to fast for comfort.

The mortgage market will be affected with higher fixed and variable rate if the Fed’s increase the Fed funds rate, so take a good look at your mortgage papers if you have one and read the fine print. Especially, if you have a variable rate mortgage!

All the Best,

Philippe Volo
Contributing Editor CompareYourLoans