Baosheng Group fixed-income analyst Afonso Borges said in a note that
Wednesday’s May US CPI prompted a modest, short-dated Treasury-led rally that
was reasonable given the inflation print beat expectations and should lower the
risk of Fed rate hikes later this year. He said the market reaction was markedly
milder than the sharp moves after last Friday’s stronger-than-expected jobs
report. Borges noted that on the 12 most recent inflation-report release days,
the two-year Treasury yield’s average move was just 3 bps—very muted and less
than half the average move on jobs-report days.
