10/15/09

Good morning. With the stock markets receiving all the attention right now, the bond market still held on Wednesday. This morning’s Consumer Price Index report, which most had expected to remain tame, did not disappoint: the CPI was only +.2% last month. Food prices fell for the sixth time in the last eight months. And compared to the same period last year, consumer prices dropped 1.3%. We also had new Jobless Claims unexpectedly fall last week to their lowest level since January. New jobless claims have declined for five of the last six weeks, and the four-week moving average for new claims dipped 9,000 last week, declining for a sixth straight week. After the numbers this morning showing low inflation and an “ok” job market we find mortgage prices worse by between .125 and .250.