MBS RECAP: Tame Inflation and Tillerson Usher Bonds to Week’s Best Levels


Posted To: MBS Commentary

Bond markets moved to their best levels in more than a week on a combination of tame inflation data and Trump's unexpected announcement of Rex Tillerson's departure from the White House. In looking at the inflation data, we could make a case for bonds two ways. First , today's Consumer Price Index (CPI) was not stronger than expected on any line item unless you want to say that last month's -0.8% change in inflation-adjusted earnings was revised to -0.6. Second , and perhaps more importantly, the un-rounded number of 0.0151% nearly made for a headline of "0.1% vs 0.2% forecast." "Nearly" wasn't worth too terribly much for bond markets, as they didn't rally profoundly right out of the gate. We can't really know how much of a rally we would have…(read more)

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