Rate-Cut Bets Extend Treasury Bond Rally Into CPI Report

Group 1 - U.S. Treasury bonds are experiencing a rally, with yields on benchmark 10-year notes reaching their lowest levels since April ahead of the CPI inflation report [1] - A lower-than-expected producer price inflation reading for August and significant job gains revision have strengthened the case for a quarter-point rate cut by the Federal Reserve on September 17 [2] - Market expectations are shifting towards potential multiple rate cuts by the end of the year, with today's CPI report being crucial for determining future rate cut probabilities [3] Group 2 - A quickening in core price pressures indicated by the CPI report could disrupt current market expectations for rate cuts, while a muted reading may suggest tariffs are not significantly impacting costs [3]