Reply To: Traders Market Weekly: Incoming Deluge of Central Bankers


Total CPI increased 0.6% month-over-month in August, as expected, with rising gasoline prices accounting for over half of the increase.

Core CPI, which excludes food and energy, rose a stronger-than-expected 0.3% month-over-month (consensus 0.2%). On a year-over-year basis, total CPI was up 3.7%, versus 3.2% in July, and core CPI was up 4.3%, versus 4.7% in July.

The key takeaway from the report is that core inflation, which is what the Fed monitors more closely, showed ongoing improvement on a year-over-year basis; however, it is still well above the Fed’s 2.0% target, reflecting a sticky quality that probably won’t compel the Fed to raise rates further at this point, but which will certainly keep the Fed in a “higher for longer” mindset.

Treasuries saw some volatility immediately after the release, but things have calmed down.

The 2-yr note yield, which jumped to 5.07% after the data, is up two basis points from yesterday to 5.02%.
The 10-yr note yield, which hit 4.34% following the data, is up four basis points to 4.30%.