Market commentary

Consumer prices rose slightly more than expected in February with headline CPI increasing 0.5% month over month and 2.1% year over year. The biggest movers were the volatile food and energy components, so ex-food and energy, CPI rose 0.2% month over month and 2.1% year over year. While higher commodity prices and energy prices are filtering through to consumer prices, the Fed believes their impact will be “transitory.” I guess we will see.

Again today, the markets are focused on the unfolding events in Japan. Although the reaction today is the exact opposite of Wednesday. Wednesday we saw a flight to safety bid in treasuries as the yield on the 10 year note fell from 3.34% to as low as 3.14%. This morning the 10 year note yield has risen to 3.26% as we seek stock markets rebound. Mortgage prices are worse by .375% to .50%.