Bond Market Update

Data Recon

• Total CPI was up 0.3% month-over-month in December (Briefing.com consensus 0.3%) after increasing 0.2% in November. Core CPI, which excludes food and energy, was up 0.2% (Briefing.com consensus 0.3%) after increasing 0.2% in November. On a year-over-year basis, total CPI was up 2.7% versus 2.7% in November, while core CPI was up 2.6% versus 2.6% in November.
  • The key takeaway from the report is that core CPI was a touch cooler than expected, which prevented the year-over-year rate from rising. While this is a small victory, it is a welcome sight for a market that hopes to see some more future disinflation that would encourage the Fed to keep cutting rates.
• Yield Check:
  • 2-yr: -1 bp to 3.54%
  • 3-yr: UNCH at 3.60%
  • 5-yr: -1 bp to 3.76%
  • 10-yr: -1 bp to 4.18%
  • 30-yr: UNCH at 4.84%