The Smart Team of NOVA® Home Loans

MBS Week Ahead: The Trend is Our Friend (Until It's Not)

Posted To: MBS Commentary

On Good Friday (when markets were closed), both Retail Sales and the Consumer Price Index came out weaker than expected. Of particular interest is the fact that Core year-over-year CPI fell back to +2.0% vs a previous reading of +2.2% and a median forecast of +2.3%. This isn't the way inflation is supposed to be going in 2017–at least not if we're to believe the narrative of higher growth/inflation that dominated the late 2016 bond market sell-off (aka "rate spike"). Of course, both sides of the political aisle would agree it's still far too soon to be jumping to any conclusions about the efficacy of the new administration's policies. But the persistent unwillingness of core inflation to rise/stay above the magic line at 2% begs the question: is it really the right…(read more)

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Source: Mortgage News Daily

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