CPI in line, bit of a relief rally...

CPI came in right where the Bloomberg consensus was: 0.2% MoM, 3.8% YoY. The bond market is rallying a bit on the news, probably more of a relief than anything else. We saw the market slowly drift downward yesterday, but I heard volume was very light in Treasuries. That probably means the real money was waiting for today's numbers, and once they came in, yesterday's sell off disappeared.

Capacity Utilization comes out at 9:15. It is an under appreciated statistic because the Fed looks at it carefully. I'm not that big a fan of its importance in explaining inflation, because to me it smacks of Phillips Curve thinking, but those guys are smarter than me so what the heck. May as well focus on what they're focusing on.