Interest rate markets exhaled a bit after the CPI print, knocking the chances of a Federal Reserve rate hike next month just below 50%.
Short-term Treasuries took some solace too, although that didn't prevent the government having to sell 10-year debt at the highest yield in almost 20 years in yesterday's auction. The yield curve from two to 30 years steepened slightly.
A game changer? Hardly. That's partly because the next instalment of the overall inflation picture is due today, with the producer price report containing important components of the Fed's favored PCE gauge, such as airfares.
And both core and headline PCE inflation are expected to have remained above 3% in July. What's more, the rebound in oil prices since July could aggravate August inflation readings, and the Fed will have that month's CPI report in hand before it meets in September.
On the energy front, Brent crude was still hovering under $90 per barrel on Thursday amid the ongoing impasse in the Gulf, albeit a tad down from the week's peaks.
Elsewhere, Japan's wholesale inflation picture looked angry too, with annual rates still running above 7% in July amid big energy price gains. Monthly rates were softer than expected, though, and the jury is out on how the data could impact the Bank of Japan's decision making.
Otherwise, world markets have slipped into the August doldrums, with major stock indexes little changed and Wall Street still near records after Wednesday's earnings-day surges in AI-related firms CoreWeave and Super Micro.
With that, onto today's column.
