Hot CPI this morning has everyone saying the Fed hikes again this month — my ARM resets in January. Lock something in now or wait?
This morning’s CPI came in hotter than expected and now all the market chatter is that the Fed raises rates again before the end of October. My 5/1 ARM resets in January and I am trying to figure out whether to start the refi paperwork now or wait for the dust to settle. The 10-year spiked to 5.2% yesterday and pulled back to 5.09% this morning. Has anyone locked a rate right before a Fed decision and had it work out — or blow up in their face?
1 answer
- Wait and watch the lender, not the headlines
Everyone panics every CPI. Your ARM reset is three months out — a quote you get today means nothing by January. What actually moves your reset is the index your loan is tied to, not the Fed funds rate directly. Read the adjustment notice when it comes, check your caps (usually 2% on the first adjustment), and start shopping about 45 days out. Anything you ‘lock’ today just expires. The only move worth making now is throwing extra principal at it while you wait.