Treasury yields edged slightly lower about 20 minutes after CPI showed core inflation at 2.8% and headline inflation at 3.8%, both 0.1 point above forecasts.
Core goods prices fell, a tariff-sensitive category the Fed has flagged as important for reopening the door to rate cuts, helping explain why bonds held up despite the hotter print.
Housing drove an outsized share of the inflation strength, and traders appear to view that component as more likely to cool over time than other sticky categories.
Supercore inflation still ran at 0.454% on the month and 3.32% annually, leaving the broader takeaway unchanged: rate cuts remain off the table for the foreseeable future.
Why are bond markets betting on rate cuts when key inflation data remains stubbornly high?
With war and AI driving up prices, can the Fed control inflation without causing a recession?
As housing and insurance costs soar, is homeownership becoming permanently out of reach for many?