Bond Market Update

Data Recon

• Total CPI increased 0.5% month-over-month in January (Briefing.com consensus 0.3%) following a 0.4% increase in December. Core CPI, which excludes food and energy, increased 0.4% month-over-month (Briefing.com consensus 0.3%) following a 0.2% increase in December. On a year-over-year basis, total CPI was up 3.0%, versus 2.9% in December, while core CPI was up 3.3%, versus 3.2% in December.
  • The key takeaway from the report is that the inflation readings moved in the wrong direction for the Fed's policy comfort (and that's before any possible impact from tariff actions), which will keep the market on edge about the Fed perhaps not cutting rates at all this year or maybe even having to keep a rate hike on its policy deliberation table.
• Yield Check:
  • 2-yr: +7 bps to 4.36%
  • 3-yr: +9 bps to 4.40%
  • 5-yr: +11 bps to 4.48%
  • 10-yr: +10 bps to 4.64%
  • 30-yr: +9 bps to 4.84%