Treaury Yields Tumble As Core CPI Disappoints

US Consumer Prices were expected to rise for the 8th straight month in January and it did rising 0.3% MoM as expected, leaving year-over-year prices rising at 1.4%…

Source: Bloomberg

However Core CPI missed expectations, unchanged in January compared to an expected 0.2% MoM rise.

Source: Bloomberg

Used Car prices and Food-at-home saw MoM declines as Energy costs and Apparel saw the biggest rises…

The reaction in bonds was instant, with 10Y Yields dropping 2bps…

Source: Bloomberg

However, we note that inflation indices are one to two months away from a dramatic rise due to basing effects from the pandemic lockdowns…

Source: Bloomberg

Will The Fed shrug them off as transitory?