The USD initially appreciated and Treasury yields spiked after CPI before taking back some of the moves. On net, the dollar is now weaker and the 2s10s Treasury curve is flatter as short-term yields have priced a more aggressive outlook for the policy rate. Headline inflation exceeded consensus expectations in line with the Scotia Economics’ estimate. Core CPI met consensus expectations and fell slightly shy of the Scotia Economics’ estimate. Revisions played a modest role in tamping down year-over-year pressures The rubber hits the road in terms of what it means to Fed policy. It’s hard to see this set of updates as ... (full story)