Mortgage rates have been moving higher fairly quickly over the past couple of weeks with the average lender easily in the 7% range for a traditional 30-year first class flat scenario. It was clear that rates were responding to stronger than expected economic data and the apprehension that we could see more of the same from subsequent reports. Today brought one of the most important subsequent reports: the June Consumer Price Index (CPI). This is the most influential inflation report of any given month in terms of interest rates and it ended up providing some much needed relief today. Inflation has moderated to a monthly pace very close to the Fed’s inflation target. To what extent such a pace can be maintained or improved, the Fed will not need to continue raising interest rates nor will the rest of the bond market need to continue to defend against this possibility. In that sense, today marks the first step in a long journey, but one that nonetheless helped bring prices down by more than one-eighth of a percentage point – and back again into the high 6% range.