4 Things Investors Should Know About Inflation

"As it does every day, yesterday’s inflation data mattered. So did the market’s reaction to it:

1. Headline inflation surprised me (a little bit) to the upside as the Energy component actually ticked up instead of down
2. But a non-breakout in inflation expectations surprised the bond market more; US Treasury bond yields closed down on the day
3. US Treasury 10-year Yield is down to 2.84% and now down 6 basis points month over month
4. It’s easy to see that USA’s headline inflation peaked at +2.74% in February of last year.