Today’s one of those days that just plain sucks for interest rates. The Producer Price Index released this morning shows 0.4% growth MoM and 5.4% YoY. That’s obviously double the hoped for rate of inflation and bonds don’t like it one bit. Mortgage pricing has surged 50bps so far today (meaning that a loan costs 1/2% discount more now than it did yesterday for the same interest rate) and the 10 year Treasury has surged to 4.981%.
So we’ve blown through the uptrend ceiling and have only the psychological 5.0% threshold to keep a lid on rising interest rates. Likelihood that the Fed raises their rates next Wednesday now lies at 71.6%
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