MONEY & MARKETS • PURCHASING POWER & INFLATION
The BLS printed July CPI this morning at exactly 3.4% — right on the consensus, down a tick from June. The good news the Fed was hoping for. And the 30-year barely moved. It closed at 5.24%, one basis point below yesterday, still at levels last seen in July 2007. When your inflation report lands perfectly and the long bond doesn’t give you an inch, that is the market telling you something. The CBO reported yesterday that the federal government is now paying $3.18 billion a day just in interest on the debt. At these yields, the tab does not shrink.
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The bond market got the CPI print it asked for, and refused to celebrate.
