CPI Print Was Perfect
Consensus CPI print was perfect, spot-on expectations.
With this print, we have unofficially arrived at neutral inflation given this is the 3rd consecutive months of 0.3% month-on-month rises in core CPI.
Bottom-line: Mr. Market is beginning to conclude that the Fed’s neutral is now greater than 2% (core CPI is 3.3% y-o-y), despite what the Fed tells us.
Treasury rates adjust accordingly.
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