To be fair, not all of the PCE data was higher than expected, but none of the top line numbers were lower than expected. Core PCE was on target (notably 0.246%, so it nearly rounded up to 0.3 vs 0.2), but headline inflation was a tenth of a point above the monthly and annual targets. Traders were apparently positioned for better news as the bond market's immediate response has been moderately quick sell-off. MBS are starting out down more than an eighth and 10yr yields are up more than 2bps from pre-data levels.
Warsh Speech at Jackson Hole Prompts Heavy Selling
Hawkish Read on Warsh Prompts Heavy Selling
Jackson Hole speeches are hit and miss when it comes to bond market volatility. Today’s Warsh speech was something of a direct hit–more than enough to sink the battl…