Mortgage rates were volatile but landed today where they started a week ago as investors await more clues about progress on inflation. Although inflation has been easing toward the Federal Reserve’s two percent target, consumer and producer price inflation accelerated in January, erasing any doubts that the first Fed rate cuts will likely have to be postponed. Asking rent growth also showed a slight uptick in January, hinting at slower disinflation.

The yield on the 10-year Treasury note – which mortgage rates tend to follow – reflects expectations about future inflation and economic growth. Rate cuts that the market expected in the first half of this year are unlikely to materialize because strong January economic data raised the risk that disinflation could be stalling. Demand for long-dated Treasury notes hasn’t been strong either. As a result, elevated pressure on yields and mortgage rates remains. Mortgage rates bottomed in the last week of December and have trended up ever since.

Core inflation measured by the Personal Consumption Expenditures (PCE) index – the Fed’s preferred gauge for inflation – had been running below target for the past three months. Be ready: The release of the PCE report next week will likely cause more rate volatility.