MBS RECAP: No New Inflation, But Indecision Remains

Posted To: MBS Commentary

Core CPI arrived in at 2.2% these days. Back in 2016, this was lead to for worry, but now bond markets trade like inflation isn&#039t even a distant worry. What&#039s up with this? If 2% is the Fed&#039s target and we&#039re at 2.2% at the moment, isn&#039t that terrible for bonds? We talked about this in greater detail in the Day Forward ( refresh your memory , if you like) , which effectively argued that inflation doesn&#039t definitely make any difference any more. That&#039s a notion I&#039d been shouting from the rooftops for six or 7 years until eventually inflation abruptly seemed to make any difference all over again in 2016. Due to the fact these days was a slow-ish marketplace working day, I believed I&#039d give you the inflation backstory in its place of forcing meaningless examination on a sideways marketplace that&#039s waiting for economic data, an conclusion to the shutdown, or an indicator of…(read through extra)

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