Bonds Reverse Selloff
The 10-year Treasury note yield rallied by 5 basis points
Highlights
• Markets were ambushed by yesterday’s CPI print, and it’s certainly a challenge to our Fed call…
• … but we see enough in the leading indicators on core prices to hold onto our disinflation view
• Businesses are losing pricing power and have run down cash buffers
• Chinese data show authorities acting forcefully (but so far unsuccessfully) to fight deflation
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