The Mortgage Man

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Tuesday May 20, 2008

Producer Price Index (PPI) Puts Pressure On Mortgage Bonds

Mortgage bonds are feeling pressure today from the Core Producer Price Index, a leading inflationary indicator, which came in at twice what was forecast.  The PPI for April came in at 0.2% which is half of the 0.4% projected, and significantly less than the 1.1% reported in March.  This is putting pressure on mortgage bonds in spite of the stock market remaining sluggish today.

Crude Oil prices set another all time high, AGAIN, last night at $127 per barrel.  This increase was likely “fueled” by OPEC’s refusal to increase oil production to meet increasing demands.  No more significant economic news is expected out today, so if the stock market continues to be sluggish, bonds will likely reap the benefits later in the trading day.

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