Last week there was welcome news via the Bureau of Labor Statistics’ Consumer Price Index (CPI) which showed that inflation on the consumer level was cooler than expected. CPI was released at 0.3% for the month of April and at 3.4% year over year. Core CPI, which removes volatile food and energy prices, was released also at 0.3% for the month of April and at 3.6% year over year besting 3.7% estimates and its prior number of 3.8%. It should be noted that rising shelter, gas, and motor vehicle insurance costs remained the key contributors to pricing and inflationary pressure. After several months of hotter than expected inflation readings, and now a slight reprieve, how will this friendly number impact the Fed’s timing for potential rate cuts this year? The Bond market acted very favorable to this report and because of this reaction mortgage rates edged lower.
Source : https://www.bls.gov/cpi/
By: Jon Iacono