Consumer Price Index (CPI)
July's Consumer Price Index (CPI) was posted at 8:30 AM ET this morning, showing inflationary pressures were softer than thought last month. The overall CPI reading was unchanged while the more important core data rose 0.3%. Both readings were 0.2% below forecasts, signaling slowing inflation. This is very good news for bonds and mortgage rates because rising inflation makes a bond’s future fixed interest payment less appealing to investors and causes them to be sold at a discount that raises yields and mortgage pricing. Hopefully, this is a taste of what will be coming in similar reports over the next few months, signaling the worst of inflation is behind us.