Situation Room: Oil > CPI

This report provides a daily update on credit markets, noting that despite an in-line CPI print, inflationary pressures—driven by rising oil prices—remain elevated. Market expectations for Fed rate hikes have increased alongside IG bond yields.

Key Takeaways

• 1.Core PCE inflation remains elevated despite softer CPI, with economists tracking +3.3% YoY for May.
• 2.Oil prices have been a primary driver of IG market yields since the start of the Iran war.
• 3.Market pricing now reflects 41bps of Fed rate hikes over the next 12 months.

Table of Contents

• Oil > CPI
• Daily supply snapshot
• Daily dealer inventories update
• Daily HG fund flows
• Daily foreign demand tracker

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