Bank of Montreal on the US inflation data. Fist, the TL;DR key takeaway:
- sets the Fed up well to begin cutting in September
More (in brief):
- The net of the data reinforces the dovish messaging from Powell and offers confirmation that the Fed's tighter policy stance is weighing on consumer price inflation.
- Initial Jobless Claims ... Continuing Claims were also better-than-expected
- Treasuries are stronger in the wake of the release and we suspect that the net of this week's bond bullish events will set the tone for the coming weeks and embolden dip-buyers as the cooling inflation data sets the Fed up well to begin cutting in September. 10-year yields have slipped to 4.173% -- setting a new local low that will be resistance in the event of follow-through strength.
