Posted To: MBS Commentary

The bond market doesn’t tend to care about wholesale inflation (PPI) relative to the mainstream indices (CPI, PCE), but a number as high as 5.6% might give us some pause. Or at least we might have have imagined it would before this morning. Bonds didn’t think twice about taking it in stride. Combine that with yesterday morning’s tame reaction to the highest CPI in 30 years and a Powell speech (later today at Congress) that reiterates the commitment to ongoing accommodation, and bonds are off to a solid start. Stocks are off to a solid start as well, and for largely the same reasons. Simply put, when economic data or Fed speakers do something to inform the outlook for Fed accommodation, stocks and bonds tend to react predictably. More accommodation = stocks up and yields down. Less…(read more)

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Published On: July 14, 2021 / Categories: Mortgage News /