Overview: Over the past week, there were no significant surprises from the economic data or the Federal Reserve meeting, and the reaction from mortgage rates was minor. Beyond that, a decline in the stock market during the period did help rates end slightly lower.

The one major economic report released over the past week was Wednesday's inflation data. The Consumer Price Index (CPI) is a widely followed monthly inflation report that looks at the price change for goods and services. In October, the results matched the expected levels. Core CPI, which excludes the volatile food and energy components, was 2.1% higher than a year ago, down from an annual rate of increase of 2.2% last month. After gradually rising for quite a while, core CPI peaked in July with a reading of 2.4%, and it is now close to the Fed’s stated target level of 2.0%.

As expected, the Fed held the federal funds rate steady at Thursday's meeting, and there were few changes in the language in their statement. Fed officials again highlighted further improvement in the labor market, while mentioning a slowdown in business investment in recent months. The CPI inflation report released since the meeting relieves some pressure for the Fed to hike rates, but investors widely expect another 25 basis point increase at the next meeting on December 19. They are much more divided about what the Fed will do next year.

Week Ahead

Looking ahead, the Retail Sales report will be released on Thursday. Since consumer spending accounts for about 70% of all economic activity in the U.S., the retail sales data is a key indicator of growth. The Durable Goods report, another important indicator of economic growth, will come out on November 21. The New Residential Construction report (also known as Housing Starts) will be released on November 20, followed by the Existing Home Sales report on November 21.