CPI Report

The CPI (Consumer Price index) report, which measures the average change paid by consumers for goods and services, came in at estimates. Core CPI, which removes food and energy due to volatility, came in just under expectations at 2.1 versus 2.2 estimate. CPI is one of the prime measurements of inflation, so the low figure is bond friendly.

Bonds and most stock indexes are in the green, with the exception being the Dow in the red from another down day in Boeing. Mortgage bonds and the 10-year treasury are both sitting on the edge of new territory, and while it is tempting to hope for the breakout, the range has held firmly since the first of the year. Pricing is at its low again, so we will maintain a locking bias.