MBS RECAP: Bonds Have Had Better Days. Thanks a Lot, CPI…

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Posted To: MBS Commentary

Old people who've been endlessly frustrated by the fact that no one seemed to be concerned about inflation for the past 6 or 7 years are finally having their day in the sun. Inflation has actually been back in vogue (or en vogue, if you're pretentious) since at least May of last year. That's when core annual CPI mysteriously began falling from its perch above 2%. It would then spend several months languishing around 1.5% before revisions. Even after revisions, Core CPI was stuck at roughly 1.7% until the November 15th report. Month-over-month Core CPI only made it up to 0.3% for the first time in a long time last month. Today's report was important because it confirmed last month's move up to 0.3% and it once again pushed the annual number up to 1.8%. All of the above builds…(read more)

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