The Inflation Hydra pops again taking the yields sharply higher and 16 bps of repricing seen in FFR

The technical view prevailed and the internals of the U.S CPI data were not encouraging. Core Services Inflation ticked higher. The Rent of Primary residences moved lower from prior month , rising 6.09% yoy, 0.36% mom (wt 7.71%) but the OER (Owners' Equivalent Rent) rose 6.23% yoy, 0.56% mom (wt 26.02%). The much awaited decline in Core Services Inflation and the Shelter Inflation eludes. 

Snapshot	YoY	MoM	Prior YoY	Prior MoM	2023 High	2023 Low
CPI	3.11%	0.31%	3.32%	0.23%	6.36%	3.05%
Food	2.56%	0.39%	2.73%	0.21%	10.13%	2.73%
Energy	-4.34%	-0.91%	-1.84%	-0.21%	8.59%	-16.68%
Core CPI	3.87%	0.39%	3.91%	0.28%	5.56%	3.91%
Core Goods Inflation	-0.31%	-0.32%	0.12%	-0.06%	2.04%	0.01%
Core Services Inflation	5.41%	0.66%	5.30%	0.38%	7.26%	5.30%
OER	6.23%	0.56%	6.34%	0.42%	8.12%	6.34%
Rent of Primary Residences	6.09%	0.36%	6.45%	0.39%	8.80%	6.45%
Shelter	6.07%	0.63%	6.16%	0.41%	8.16%	6.16%
Services	4.99%	0.70%	4.96%	0.38%	7.62%	4.96%

US 2Y yields surged from prior CPI release lows of 4.425%to highs of 4.639% and the implied pricing off Fed Fund Futures now sees market pricing in a cumulative of 95 bps of rate cuts compared to 111 prior to the release.