MBS Week Ahead: Jobs? Sure, But How About Inflation?


Posted To: MBS Commentary

Last week was was a bit lacking in terms of trading days due to the holiday market closure, but it made up for that with bigger-ticket data and events on Friday. This week is a bit lacking in terms of scheduled economic data, but it will make up for that by offering another top tier release in the form of CPI (the "consumer price index"). CPI is the most important inflation data there is, based on the market's willingness to react to it.As far as potential reactions are concerned, traders are on the lookout for a break above 2.3% in CORE y/y CPI. That's as high as it has been since before the Great Recession and it's the forecast for this week's report. There's a longstanding thesis–especially among academic market participants–that stronger job growth results…(read more)

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