Rates rebound on tame consumer inflation of 1.2% year-over-year (CHARTS)

Rates have rebounded about .25% since rising for several days last week through Monday. Today’s US Consumer Price Index, which measures inflation at the consumer level of the economy, helped matters. It was nearly flat at 0.2% in October and 1.2% year-over-year through October. Excluding volatile oil and food costs from the readings, “Core” CPI for October was unchanged and increased 0.6% year-over-year through October. This follows yesterday’s Producer Prices which measure business and manufacturing inflation. Those figures were a bit hotter, especially October year-over-year PPI at 4.3%, but today’s tame CPI is outweighing PPI when it comes to rate markets. CPI and PPI chards shown here.

As of Monday, rates were up about .375% from their all time lows reached early-October when speculation about quantitative easing was strongest, but when the Fed announced November 3 that they’d focus quantitative easing on buying Treasury bonds and not mortgage bonds, rates rose as mortgage bonds sold off—yields or rates rise when bond prices drop in a selloff. Mortgages have since rallied back and we’ve regained about .25% in rate. You can click the CPI and PPI charts to scroll to our data section and auto-create charts. Keep up with market-moving releases using our Economic Calendar.