Mortgage Bonds got some good inflation news by way of the Consumer Price Index: the CPI for July was reported at 0.1%, and the more closely watched Core CPI at 0.2%. The Report was in line with expectations and suggests that Core Inflation is stable to moderating. This is good news for Bonds and the Fed.

Yesterday, Bonds were able to make a successful bounce higher off of the 25-day Moving Average. For the moment, I advise cautiously floating, but be ready to take action if Bond prices turn lower.