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Inflation Fears Dictate Bond Prices
Friday, June 13, 2008

Mortgage bond prices opened lower following the data this morning only to bounce back toward positive on the day. Higher than expected headline consumer price index data has some traders worried. Expect bond market volatility to continue.
CPI rose 0.6%, higher than the expected 0.5% increase. The core was in line with expectations rising 0.2%.

Inflation fears along with funding and liquidity concerns still have mortgage bonds generally out of favor with investors.
Oil prices fell this morning as the dollar strengthened a bit. Be cautious, prices are likely to remain volatile. Inflation remains the focus of traders.
Posted By Bruce A. Myers


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