One of the biggest challenges in economics is making sure you’re watching the dog—not the tail.

It’s easy to get caught up in the latest inflation headline, but the underlying trend often tells a very different story.

That’s one reason the Dallas Fed publishes its Trimmed Mean Inflation measure. Rather than treating every price change equally, it removes the most extreme price movements, both the highest and the lowest, to filter out temporary spikes and localized swings.

The result? A clearer picture of underlying inflation. Instead of reacting to every headline, policymakers can better see the “forest through the trees.”

This is one of the inflation measures many economists watch because it tends to be more stable and may provide a better indication of where inflation is actually headed.

Meanwhile, oil has fallen to around $68 per barrel, continuing to ease inflation concerns and providing support for the bond market. Mortgage bonds are improving this morning, which is helping keep downward pressure on interest rates.

For now, we’re continuing to float our clients while watching the market closely. Volatility can still change the picture quickly, but the overall trend has become more encouraging.

Have a fantastic weekend, and I’ll see you Monday!

http://www.YourApplicationOnline.com