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Daily Market Update 5/13/11

Mortgage rates inched lower in volatile trading Friday.  This morning, the Consumer Price Index (CPI) for April rose 0.4%, slightly higher than expected.  The CPI increased 3.2% from one year ago, the highest annual rate since 2008.  Meanwhile, the closely-watched “Core” rate, which excludes food and energy components, rose at a tame 1.3% annual rate, well below the Fed’s target range of about 2.0%.  Fed officials maintain that they expect the inflationary effects of higher oil prices to be transitory  Oil prices have risen about 45% over the past year.  Meanwhile, wage growth, a major factor in inflation levels, has remained subdued.  Key economic indicators due out next week include Industrial Production and Housing Starts on Tuesday, minutes from last month’s Fed meeting on Wednesday, and Existing Home Sales on Thursday.  No other key data will be released today.

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