04/28/2023
Today's inflation update showed that core PCE inflation came in as expected month-over-month but slightly beat expectations year-over-year. The employment cost index also came in slightly higher than expected. While yesterday's PCE numbers implied slightly higher inflation, the bond market was relieved with the in-line month-over-month numbers and only a slight beat on year-over-year numbers. As a result, 10-year yields have increased and MBS are up a quarter point in 5.0 coupons.