Cycle Trading

[spdpro]

more on that "CPI"

If the Fed doesn’t hike > It doesn’t mean they will cut > The "Game"

Treasury yields fell sharply, and particularly the moves in the longer end of the curve were remarkable
.
The 10-year yield dipped some 15bp after the softer inflation report and the 30-year Treasury dipped some 12bp before
recovering a few of these basis points.

Everyone is happily subscribing to the view that inflation may, in fact, not be permanent – after this one CPI release
provides a mere 0.1 percentage point windfall?

CPI 0.1% undershoot seems insurance-related. The BLS reported a -34% y/y decline in health insurance costs!
That hardly seems credible given the trends of ageing population and rising costs everywhere, including in medical care

>>> Instead, the BLS changed its calculation methodology. Even at a weight of just 0.525%, that’s a 0.17 percentage point drag on headline CPI.

As expected, the prospect of lower yields did wonders to equities. The S&P 500 gained 1.9% on the day,