Stocks are mixed as investors digest consumer price data. The latest inflation report showed that prices eased slightly last month, providing support to the belief that the Fed will pause rate hikes. Focus now shifts to tomorrow and producer price data.
The Consumer Price Index rose 0.4%, matching expectations, and prices were up 4.9% YoY, just below expectations and the lowest level since April 2021. Core prices were also up 0.4% for the month and rose 5.5% YoY, both meeting expectations. Increases in shelter, used vehicles, and gasoline costs greatly offset declines seen in the other components of the energy index.
Elsewhere, MBA mortgage applications were up 6.3% last week. The Purchase Index was up 5% and the Refinance Index was up 10%, reaching its highest level since September, a positive response to the drop in rates seen last week. The report also showed that the average interest rate of a 30-year mortgage fell 2 basis points to 6.48%.
Treasury yields are lower, with the 2-year T yield down 7.5 basis points to 3.95%, the 5-year T yield down 8.1 basis points to 3.42%, and the 10-year T yield down 6.0 basis points to 3.46%. Shorter-term advance rates are mostly higher, while longer-term rates are lower.