In today’s mortgage market update, UMBS started the day down 52 bps, while S&P Futures gained 9 points. Bond markets remained relatively stable overnight but encountered sellers after the release of economic data.

Key Data Points:

  • Core CPI m/m met expectations at 0.3%.
  • Core CPI y/y remained at the anticipated 4.1%.
  • Headline CPI m/m exceeded forecasts at 0.4%.
  • Jobless Claims slightly undershot expectations at 209k.
  • Challenges include rising shelter inflation, strong jobless claims, and notable increases in auto insurance, auto repair, and food away from home.

The FOMC minutes showed a consensus on a potential future increase in the federal funds rate. The bond market also faced difficulties with a higher-than-expected yield in the sale of 30-year bonds.

While short-term bond fluctuations are common, they typically don’t redefine long-term trends. Today’s sell-off resulted from disappointing core services data in the CPI report, an area closely watched by the Fed for inflation signs.

Closing Thoughts: UMBS closed the day down 64 basis points, highlighting the day’s challenges. Keep an eye on the bond market’s response to economic data and Fed hints.

In other news, the CFPB is exploring rule changes that could impact how medical bills affect Americans’ credit reports, aiming to offer financial relief and address credit data inaccuracies. Stay tuned for updates on these developments.

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