Record Single Day Drop in Rates After Inflation Comes in Cooler
Heading into this week, we knew that Thursday's Consumer Price Index (CPI) would be critically important. It did not disappoint.
CPI is one of two key inflation reports in the US. PCE (Personal Consumption Expenditures) is the other big index, but because CPI comes out 2 weeks earlier, it gets almost all of the market's response.
The response to Thursday's CPI was record setting in at least one important way, and still astonishing in many others. Let's talk about why.
Why was this week's CPI so important?
First off, almost every CPI report has been important in 2022. No other economic report has caused more volatility for the bond market. Because bonds dictate interest rates , we can also say CPI has caused just as much volatility in the mortgage world.
CPI is
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