CPI vs Expectations

The CPI was much lower than the consensus expectation, at least for the headline numbers. Excluding food and energy, the consensus was spot on.

Bond Yield Reaction

I took a look at bond yields late yesterday and then again at about 10:50 AM Central today. 

The rates are little changed, with no change on a couple of the benchmarks. 

The same holds true for fed rate hike expectations.

Will the Fed Hike Interest Rates in May then Cut in July?

(Click on image to enlarge)

Data for the above chart is from CME Fedwatch as of April 11, 2023, at 12:40 AM. 

May and July Odds Today

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March 2024 Odds

Looking all the way out to march of 2024, the weighted average expectation barely changed as well. Yesterday, the expectation was 4.05 percent and today it's 3.98 percent.

For discussion please see Will the Fed Hike Interest Rates in May then Cut in July?

Fred just posted the CPI data, charts coming up shortly.

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