This week is a tale of two items: Rates and Vantage.

Rates

PPI came out at .4% for the month matching consensus and at .2% for the more narrow ex-food-and-energy core inflation. CPI came out very similar with .4% for the month, in line, and with core at .3%. That puts us at annualized 3.4% inflation, above that 2% metric.

Combined with jobless claims sticking flat week over week it starts to paint a picture of a rate increase. The finisher?

Oil bumped back up to over $100/barrel. Since the Houthis knocked out even more Saudi oil production, this isn't likely to be a blip on the radar but a prolonged effect.

That has many anticipating the Fed is going to increase rates next week. How many? 85% are currently predicting a rate hike.

Since the Fed rarely likes to do one-offs, that means we'll likely see a 25BPS next week, and then another 25BPS the following month.

There is a glimpse of silver lining: The bond market has not been happy, even with Bessent tripling his normal re-purchases. There's a growing theory that the Fed bumping up rates will give the market confidence that the Fed will control this, and that might actually bring calming to the bond market and help rates.

Rates bumped up another 5BPS, putting us now to 41BPS over last year and MBA applications down 3% for the week.

Vantage: Pulte released a tweetstorm of Super El Nino proportions. Let's go over them.

1.) Vantage Available Immediately: He's said it before, but this time it was real. Vantage is now available to everyone, with new LLPAs. Secondary market is still figuring out how to take it and most investors haven't put out notices confirming their acceptance, or pricing, yet.

2.) Bimerge is back, baby: He announced that bi-merge is another focus item over several tweets. Oh boy. He even announced seeing a future with no credit scores and one bureau!

3.) No FICO Yet: No FICO 10T, nor news confirming when and how. His only references were disparaging them for pricing practices.

4.) Internal Scoring Data: He finally announced that all MBS and CRTs will have both FICO and Vantage (???!?!) and internal Fannie/Freddie scoring data metrics.

This should be fun!