The Consumer Price Index rose this morning by 0.2%, and 1.7% YOY, indicating that the stuff we are now buying is more expensive than it was a few months ago. There was something else that also rose. Let’s see what was that? It’s on the tip of my tongue…oh yes, that’s it: the Fed raised rates yesterday by 0.25% and also said that they are planning on three rate hikes next year. The bump yesterday was not a surprise; the three-peat announcement was a shocker.
So outside of the increased cost of borrowing money, Rent is up 0.3% last month and 3.9% from last year, and Medical Costs are up 4.0% from last year. In her prepared statement yesterday, Ms. Yellen forecast the Unemployment Rate to stay close to the current 4.6% through 2017, and also predicted a 2.0% average GDP growth through 2019.
The mortgage bond market had a pretty rough go yesterday, which, depending on the maturity, lost almost 100 points. Perhaps we bounce back today and perhaps rates continue pushing higher…
