Next stop: 5.20%

CPI came in line with expectations, but the core figure was 1/10 higher, so the 10-year is down 1/4 point. I need about 1/4 point more to get to 5.20%, and I'd guess that the reaction to CPI is a bit muted because people want to hear Bernanke's testimony before trading it too aggressively. Fed Funds futures look like 5.5% is almost a lock for September, and is more than a lock for October, meaning that there is a slight chance of 5.75%.

Corporates and MBS are doing pretty well today. J.P. Morgan's strong earnings are helping the stock/corporate bond market.