CPI in a nutshell

The headline Consumer Price Index gained 0.4% in July. The core CPI rose 0.2%. Both numbers were roughly in line with expectations, though arguably, core was one-tenth below expectations. Initial reaction in 10-year Treasury notes is a 4 basis point decline. Long bond futures up 13/32.

Still, the year-over-year change in the core CPI actually increased to 2.7% from 2.6%. And inflation pressures were fairly broad-based, in transportation, education, recreation, and (not surprisingly) energy.