US CPI rising to 5%, above expectations of 4.7% received a mere shrug of the shoulders from markets. The release did little to stem the decline in US yields with the 10yr now at the lowest level since early March, highlighting just how short the market is of USTs as bond vigilantes feel the squeeze. However, looking under the hood, CPI had once again been boosted by transitory factors with used cars and trucks up a sizeable 7.3% on the month (29.7% Y/Y), which will likely reinforce the Fed’s message that they will remain patient with the inflation spike seen as temporary. In light of the pullback in US yields, in ... (full story)