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US Core Inflation is Still Running Hot
My what a whippy market we have these days! The FOMC has set the script for most of the summer and yet a slightly firmer than expected set of inflation readings sparked a near riot in fixed income which probably speaks more to wrong-footed positioning into the data. Post release the yield on 2s is about 10bps higher as the curve flattened a touch with 10s about 7bps higher. The dollar initially rallied but is now flat. The S&P is very slightly firmer this morning. Headline CPI inflation landed above consensus and matched my bottom-up estimates for 0.3% m/m and 8.3% y/y. Core inflation climbed 0.6% m/m and 6.2% y/y ... (full story)