Slightly Hotter CPI No Problem For Bonds

Slightly Hotter CPI No Problem For Bonds

This morning's Consumer Price Index (CPI) came in slightly hotter than expected with core inflation running 2.8% annual vs 2.7% forecasts and overall inflation at 3.8% vs 3.7%. Bonds have traded both ways after the data, but after 20 minutes, yields were actually LOWER by a hair. What gives? We know traders are trading the data based on volume. The stalemate could have to do with core goods (a proxy for tariff-related inflation) moving lower. The Fed has called this category out as a prerequisite for considering rate cuts again. The rest of the data was less friendly but housing played an outsized role. This is actually better for the rate outlook because traders think housing will ultimately trend lower over time. That said, the non-housing metric (supercore, .454% monthly and 3.32% annually) remains far too high for a rate cut discussion to be on the table for the foreseeable future.

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MBS & Treasury Markets
UMBS 5.0
98.22
-0.18  
10YR TREASURY
4.455
+0.046  
5/12/2026 10:55AM EST
MBS are down more than eighth of a point from the AM highs and 10yr yields are up 4.3bps at  4.451 following a slew of war-related headlines (with the gist being that Trump is not in a rush to end the war). Most lenders were not yet out with rate sheets when MBS were at their highs (8:45 - 9:00am ET), so intraday reprice risk is limited. This is more of a heads-up for those with overnight price protection that you are almost certainly looking at higher rates this...   READ MORE
Today's Mortgage Rates
30YR Fixed
6.52%
+0.03%  
15YR Fixed
6.03%
+0.03%  
5/12/2026
Last week was decidedly stronger for mortgage rates as they either held steady or moved lower on 5 out of 5 days. All told, it was a 0.14% drop from the previous week in terms of the average top-tier 30yr fixed rate.  The new week is starting out in opposite fashion with rates moving up 0.07% today alone. This follows news over the weekend that Trump rejected Iran's counterproposal to end the war. In general, the longer the war continues, the higher oil prices will r...   READ MORE
Economic Calendar
Time Event Period Actual Forecast Prior
Tuesday, May 12
12:00AM Roll Date - UMBS 30YR
3:15AM Fed Williams Speech
6:00AM Apr NFIB Business Optimism Index Apr 95.9 96.1 95.8
8:15AM ADP Employment Change Weekly 33.0K 39.25K
8:30AM Apr m/m Headline CPI (%) Apr 0.6% 0.6% 0.9%
8:30AM Apr m/m CORE CPI (%) Apr 0.4% 0.3% 0.2%
8:30AM Apr y/y CORE CPI (%) Apr 2.8% 2.7% 2.6%
8:30AM Apr y/y Headline CPI (%) Apr 3.8% 3.7% 3.3%
11:30AM 6-Week Bill Auction (%) 3.615% 3.630%
12:00PM WASDE Report (%)
1:00PM 10-yr Note Auction (bl) 42
1:00PM Fed Goolsbee Speech
2:00PM Apr Federal budget (bl) Apr $220B $-164.1B
Wednesday, May 13
7:00AM May/08 MBA Refi Index May/08 928.6
7:00AM May/08 MBA Purchase Index May/08 171.1
7:00AM May/08 Mortgage Market Index May/08 285.3
8:30AM Apr PPI y/y Apr 4.9% 4%
8:30AM Apr Core PPI m/m (%) Apr 0.3% 0.1%
8:30AM Apr Core PPI y/y (%) Apr 4.3% 3.8%
8:30AM Apr PPI m/m (%) Apr 0.5% 0.5%
10:30AM May/08 Crude Oil Inventory (ml) May/08 -1.6M -2.314M
11:30AM Fed Collins Speech
1:00PM 30-Year Bond Auction 4.876%
1:00PM 30-Yr Bond Auction (bl) 25
1:15PM Fed Kashkari Speech
7:00PM Fed Logan Speech