Despite more inflationary pressures and strong economic data releases, mortgage rates fell this week, gradually receding toward their lowest level in two weeks.

The muted reaction to the highest annual change in the core personal consumption expenditure (PCE) price index in nearly three decades was the latest evidence that investors are buying into the idea that rising price pressures are transitory, and more accurate readings on inflation will come only after supply chain restrictions ease. It also signified that longer-term economic growth expectations, which surged earlier in the year, have moderated in the last couple months. Investors are now expecting steps to tighten monetary policy to be taken earlier than previously expected and slightly smaller fiscal stimulus than they did earlier in the year. Combined, longer-term Treasury yields have retreated in the last couple months, even as shorter-term yields have risen, keeping downward pressure on mortgage rates.

That said, this outlook has a chance to shift again in the coming days with the release of the June jobs report. Recent jobs data haven’t had an outsized immediate impact on mortgage rates, but they have managed to alter rates’ path forward in the weeks that followed.