Good Friday Morning from your Hometown Lender,

Today was the bigger data day for the week.

The Fed’s favorite inflation gauge was on tap and all eyes are watching. Quick answer is it came in lower than expected as did personal income and personal spending. Annualized inflation down to 2.2% and that will make the Fed very happy. Here are the numbers but the result is we are seeing some green on the board. The 10yr is down to 3.75% and mortgage bonds are +20bps.

• PCE MOM 0.1 vs 0.1
• Core PCE MOM 0.1 vs 0.2
• Pers Inc 0.2 vs 0.4
• Pers Spend 0.2 vs 0.3

So, rate sheets improved this morning from yesterday…

As bonds finally show some signs of rebounding after moving lower the last week. Reprice risk on the day is low, although it is possible we could see bonds lose the early gains that doesn’t currently look like that will be a problem. Today’s gains are a nice way to end the week but it’s next week’s jobs data that we are hoping turns the tide for rate sheets.

Even though we’ve seen rate sheets worsen this week it’s important to remember that rates are not moving up much from here, we are not in a rising rate environment. The worsening we have seen would be considered a “correction”, and that markets had been over optimistic about the Fed cuts.

Stay safe, enjoy the weekend, and first make today great!