Bond Market Update

Data Recon

• Total CPI was up 0.3% month-over-month in September (Briefing.com consensus 0.4%) following a 0.4% increase in August. Core CPI, which excludes food and energy was up 0.2% (Briefing.com consensus 0.3%) after rising 0.3% in August. On a year-over-year basis, total CPI was up 3.0% versus 2.9% in August, while core CPI was also up 3.0%, versus 3.1% in August. These readings remain above the Fed's 2.0% PCE inflation target.
  • The key takeaway from the report is that CPI and Core CPI were both cooler than expected, which will keep the market thinking that the FOMC will announce a 25-basis point rate cut at the conclusion of next week's policy meeting and should not upset expectations for another cut in December.
• Yield Check:
  • 2-yr: -2 bps to 3.46%
  • 3-yr: -3 bps to 3.46%
  • 5-yr: -2 bps to 3.58%
  • 10-yr: -1 bp to 3.98%
  • 30-yr: -1 bp to 4.57%