December 19th, 2025 9:15 AM by Richard Sardella MLO.100007700/NMLS 233568
Yesterday’s November CPI inflation data was lower than forecasts. It is being rejected by traders because the CPI report is seen as old news with patched up data that may not represent the actual inflation measure. The more convincing PCE inflation report was expected today but BLS changed the release date.
After digging into the CPI data all day yesterday economists are clawing back the importance of the release saying issues with the data collection and calculation process, including the use of carry-forward inputs for key housing price metrics, and warned that the results should not be taken at face value. The decline of inflation was too good to be true, what was wrong according to news this morning was there were too many data points not calculated in the report, particularly shelter costs. A spokesperson for BLS, said the agency used a process called carry-forward imputation for key housing price metrics. This method “imputes the price by using data from the last collected period, effectively proceeding as if the price had not changed,” she said. “Rents for October 2025 were carried forward from April 2025, yielding unchanged index values for rent and owners’ equivalent rent for October.”
Wells Fargo economists said in a note, “Take It with the Entire Salt Shaker." Another voice, “There is no world in which this was a good idea (data), but here we are,” said Omair Sharif, president of Inflation Insights LLC.
November existing home sales expected at 4.15 million, reported at 4.13 million.
The University of Michigan consumer sentiment index expected at 53.4.
Next week starts holiday trading, trade volumes usually decline increasing the potential of volatility.
PRICES @ 10:00 AM
10 year note: 4.15% +3 bp
5 year note: 3.70% +3 bp
2 year note: 3.50% +3 bp
30 year bond: 4.83% +3 bp
30 year FNMA 5.0: @9:30 am 99.63 -9 bp (-7 bp from 9:30 am yesterday)
30 year FNMA 5.5: @9:30 am 101.26 -6 bp (-3 bp from 9:30 am yesterday)
30 year GNMA 5.0: @9:30 am 99.66 -6 bp (-6 bp from 9:30 am yesterday)
Dollar/Yen: 157.35 +1.80 yen
Dollar/Euro: $1.1730 +$0.0005
Dollar Index: 98.55 +0.12
Gold: $4,368.20 +$3.70
Bitcoin: 88,428 +3758
Crude Oil: $56.67 +$0.52
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Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.
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MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.