The January Consumer Price Index (CPI) increased by 0.5%, exceeding the 0.3% estimate. Overall inflation ticked up from 2.9% to 3.0%.

This is bad news for the bond market. Even the Core CPI, which excludes food and energy, rose by 0.4%—twice the expected increase.

At 1:00 p.m. ET, a 10-year Treasury Note auction will take place. Strong demand, given the higher yields this morning, could offer some relief.

For now, the damage is done—we just have to move forward.

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