Producer Price Index (PPI)
This morning’s only relevant economic data was March's Producer Price Index (PPI) that showed inflationary pressures at the manufacturing level of the economy spiked much more than predicted. The overall reading came in at up 1.0%, while the more important core data that excludes volatile food and energy prices jumped 0.7%. Both readings were well above forecasts of up 0.5% and 0.2% respectively. These readings are clearly bad news for bonds and mortgage rates because rapidly rising inflation makes long-term bonds, such as mortgage securities, less attractive to investors. That leads to higher yields and increases to mortgage rates.