MBS RECAP: Inflation Expectations Dragging Rates Down

Posted To: MBS Commentary

There were a few good years in the middle of the financial crisis recovery where inflation data just didn't matter. Various economic reports could indicate higher or lower inflation, but markets didn't respond. Older dogs who'd lived through the 70's and 80's were confounded by this new world order. But just when everyone was beginning to get on the same page with inflation not mattering, now it matters again! Things are a bit different right now though. The inflation that matters is the kind that might eventually show up and make the Fed wish they'd raised rates soon enough to keep it stably in check. Of course it hasn't shown up yet, so the Fed is forced to look for clues that it might show up in the future. One of those clues is wage growth. That wasn't so…(read more)

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Source: Mortgage News Daily

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