Ep. 75 | Bonds Unfazed Despite Inflation Hitting a 3-Year High

Inflation rose to 4.2% in May, the highest annual rate in three years, but the report wasn't quite as alarming as the headline number suggested. Nearly 60% of the monthly increase came from energy prices, as higher oil and gasoline costs continued to ripple through the economy.President Trump praised the report, saying he "loved the inflation," arguing that most of the increase was tied to energy rather than broad-based price pressures. While there is some truth to that interpretation, the comment could become a political liability heading into November as voters continue to grapple with higher prices.Meanwhile, bond markets largely looked past the inflation report. A strong 10-year Treasury auction helped steady yields, limiting the upward pressure on mortgage rates despite the hottest inflation reading since 2023. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit wilmingtonmortgage.substack.com