A downside surprise on estimates for US CPI in the month of July saw the dollar sink alongside bond yields, while equities rallied hard in the immediate reaction. While the greenback was dumpstered and equities ran with gains, bond yields actually recovered somewhat with 10-year Treasury yields erasing the drop from yesterday to keep back at 2.79% currently.

As much as broader markets are looking for a Fed pivot, policymakers aren’t pulling back on expectations just yet. For example, Daly suggested she would be supportive of a 50 bps rate hike next month but still sees rates rising to just under 3.50% by year-end. And that doesn’t mean that they will pause at that juncture.