Bond Market Update

Data Recon

• Total CPI increased 0.6% month-over-month in April, as expected, following a 0.9% increase in March. That left total CPI up 3.8% year-over-year versus 3.3% in March. Core CPI, which excludes food and energy, jumped 0.4% month-over-month (Briefing.com consensus: 0.4%) following a 0.2% increase in March. That left core CPI up 2.8% year-over-year versus 2.6% in March.
  • The key takeaway from the report is the elevated inflation readings, which are well above the Fed's 2.0% inflation target and a signal not to expect a rate cut anytime soon.
• Yield Check:
  • 2-yr: +2 bps to 3.97%
  • 3-yr: +3 bps to 4.00%
  • 5-yr: +2 bps to 4.09%
  • 10-yr: +2 bps to 4.43%
  • 30-yr: +1 bp to 5.00%