From the Fed's pause last week through Tuesday, long-term rates rose every day, the bond market demonstrably upset that the Fed had flinched from the inflation fight. Two inflation reports later, mortgage rates are lower than they were before the pause, and Federal Reserve Chairman Ben Bernanke is the wisest man alive. I suspect that both reactions were overdone, but the show was somethin' special. The Producer Price Index, heavy with physical goods, rose overall only .1 percent in July (versus .4 percent forecast), and the core rate actually declined .3 percent, the biggest drop in three years. Yeah, distorted by giveaway discounts for autos, and yeah, prices of services are not included, but there was no sign of a worsening problem. Then consumer prices...not as pretty, overall up .4 per...
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