Personal Income and Outlays
The first of this morning’s two economic releases was February's Personal Income and Outlays report at 8:30 AM ET. It revealed income and spending were inline with expectations. Income pegged forecasts at up 0.3% while spending rose 0.2%, falling just short of the predicted 0.3%. The good news came in the core PCE inflation index within the data that rose 0.3% when it was expected to rise 0.4%. Not only did the monthly rate come in lower than expected, but the year over year number also fell below January’s level, hinting that inflation is easing (albeit very slowly). Since this index is the Fed’s preferred inflation reading and waning inflation makes bonds more attractive to investors, we can consider the report to be favorable for mortgage rates.