We’ll see the monthly Consumer Price Index tomorrow, where last month’s Headline 3.1% is expected to be repeated. The Core CPI is expected to decline from 3.9% to 3.7%. You’ll recall from fastidiously committing my thoughtful writing to memory over the last 17 years that the Core number strips out food and energy. Rising oil prices and California’s new $20 minimum wage for fast food workers will probably invert the Headline/Core number in a few months. Leveling out some of the erraticism is why the Core number exists, and it’s the number we should be focusing on. Dropping 0.2% will be welcome.
Having said that, after the two-week MBS price runup, today is a good day to lock in a rate ahead of tomorrow’s CPI report. Remember that if rates do drop once a rate is locked, I have the best rate-float-down/renegotiation policy in the whole industry.
