Institution: Short-term Treasuries' Reaction to CPI Is Typically Less Sensitive Than to Employment Data
Svmuu reported that analysts at Julius Baer Group, led by Afonso Borges, noted in a report that the moderate rebound led by short-term Treasuries following the release of the US May CPI report on Wednesday is "understandable." This is because inflation data came in better than expected, which should reduce the risk of the Federal Reserve raising interest rates later this year. The fixed income analyst stated: "Compared to the sharp volatility triggered by the stronger-than-expected employment report last Friday, this market reaction is notably more subdued." He pointed out that over the past 12 inflation report release days, the average fluctuation range of the two-year Treasury yield was only 3 basis points. This fluctuation range is "very mild, less than half the average fluctuation range on employment report release days." (Jin Shi)
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