Posted To: MBS Commentary

The sun also rises and inflation also misses its forecast! After several months of reasonably big upside surprises, core PCE inflation finally undershot the median forecast, even if not by much (3.5 vs 3.7). Based on recent reactions to inflation data, this isn’t huge news because markets are more interested in the longer-term inflation landscape. For now, traders have been willing to look past inflation swings that have been driven in large part by covid-related supply chain disruptions. Big upside surprises in recent months didn’t do meaningful damage to bonds, so turnabout is fair play with Friday’s downside surprise. Month-end , corporate issuance , earnings, and technicals will set the tone for small scale volatility. In the slightly bigger picture, both stocks and bonds continue…(read more)

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Published On: July 30, 2021 / Categories: Mortgage News /

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