US inflation means the Fed is on the wrong side of the equation
US 10-year yields are down 3.6 basis points to 2.49%. It's been a disappointing stretch for bond bears after they hit 2.61% on April 19.
The story today is inflation. The price measures in the GDP report showed the inflation deflator at just 0.6% versus 1.3% expected. Some of that will reverse on higher commodity prices but it's more evidence that the Phillips Curve isn't behaving as the Fed expected.
You can see USD/JPY tracking the fall lower in yields with a 10-day chart:
