Bond Market Update

Data Recon

• Total CPI increased 0.2% month-over-month in January (Briefing.com consensus: 0.3%) and was up 2.4% year-over-year, versus 2.7% for the 12 months ending in December. Core CPI, which excludes food and energy, increased 0.3% month-over-month (Briefing.com consensus: 0.3%) and was up 2.5% year-over-year, versus 2.6% for the 12 months ending in December.
  • The key takeaway from the report is that it showed some encouraging disinflation on a year-over-year basis, which the market will perceive as an opening for the Fed to consider additional rate cuts even with GDP growth running above potential.
• Yield Check:
  • 2-yr: -3 bps to 3.44%
  • 3-yr: -3 bps to 3.48%
  • 5-yr: -2 bps to 3.64%
  • 10-yr: -2 bps to 4.08%
  • 30-yr: -1 bp to 4.72%