More Data to Prove The Fed's Point; Rates Don't Like It

It will take one of two things for the current rising rate trend to run its course.  Either the economic data needs to shift in a compelling way or the selling needs to take rates back up to 2022's highest rates at which point markets will conclude a compelling economic shift is imminent.  Neither option is "fun" for the mortgage/housing market.  Today's CPI wasn't as much of a barn burner as the jobs report 2 weeks ago, but it was high enough to prove the Fed's persistent point regarding stubbornly elevated inflation.

Econ Data / Events
    • Core CPI m/m
      • 0.4 vs 0.4 f'cast, 0.4 prev
      • last month revised up from 0.3
    • Headline CPI m/m
      • as expected at 0.5, but...
      • last month revised up from -.1 to +.1
Market Movement Recap
09:18 AM

First move was weaker after CPI, followed by a quick recovery and now back to slightly weaker territory.  10yr up 2.9bps at 3.732.  MBS down an eighth of a point.

10:45 AM

Weakest levels now with 10s up 6+ bps at 3.768 and MBS down almost 3/8ths of a point.  No new motivations, just an ongoing reaction. 

01:47 PM

Decent recovery since noon, but still down 3/8ths on the day in MBS.  10yr still up 5bps at 3.75+ (off previous highs of 3.80).

02:50 PM

Little-changed from previous update with 10yr up 6bps at 3.764 and MBS down just over 3/8ths.  No major reaction to Fed speakers.

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