CPI

CONSUMER PRICE INDEX –DECEMBER 2018

The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.1 percent 
in December on a seasonally adjusted basis after being unchanged in November, 
the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, 
the all items index increased 1.9 percent before seasonal adjustment.

Interest rates

Bespoke examined what happens when short-term interest rates rise above longer-term rates and found that when the 3-year and 5-year spread inverts, other spreads soon follow, and then a recession.

Mortgage Rates

The 30-year fixed-rate mortgage averaged 4.94% in the Nov.15 week, unchanged during the week. The 15-year fixed-rate mortgage averaged 4.36%, up three basis points. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.14%, also unchanged.

8 year high.

A Muni Offering

In the news …

Security Description: VISALIA CA UNIF SCH DIST COPS UNDERLYING S&P A+

Rating: AA(S&P)
Insurance Desc: AGM
Interest Rate: 4.00%

Maturity: 5/1/2040
Call Features: 5/1/2021 @ 100
Yield to Call: 3.285%
Yield to Maturity: 3.864%

Price: 102

Interest rates

“The 30-year fixed-rate mortgage averaged 4.04% during the week ending Jan. 18, Freddie Mac said Thursday, up from 3.99% in the prior week. The 15-year fixed-rate mortgage averaged 3.49%, also up five basis points. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.46%, unchanged during the week.”

Munis Bonds

FMSBonds says:

“As uncertainty continues to surround the ever-changing tax overhaul plan, municipal bond issuers aren’t taking any chances: They’re conducting a gusher of bond sales at a pace not seen in more than 30 years.

Issuance this week is expected to total almost $12 billion, according to Thomson Reuters, following two weeks that each saw $20 billion in sales.

At the current rate, state and local governments are on track to easily exceed the monthly record of $54.7 billion in bond sales reached in 1985.”