US core inflation came in slightly below almost all expectations for the month of September. Most of the softening was driven by shelter and little evidence of tariff pass through into core goods prices. Still, beneath the hood lies ongoing strong pressures on underlying core service prices. The result added a little to market expectations for rate cuts by the Federal Reserve. The two-year Treasury yield fell by about 5–6bps at first but clawed that back to about 3bps. Cumulative pricing for cuts between now and the April meeting increased a bit to about 80bps of further reductions. The dollar swung from gaining ... (full story)