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.
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- 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
- Core CPI m/m
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.
