U.S. core inflation unexpectedly cools in May, traders still bet on Fed rate hike before year-end

Odaily Planet Daily News U.S. core CPI rose 0.2% month-on-month in May, lower than the market expectation of 0.3%. U.S. Treasury bonds edged higher, and bond traders maintained their bets that the Federal Reserve would raise interest rates before the end of the year. The data is seen as providing some relief for the Federal Reserve ahead of Kevin Warsh chairing his first meeting as Fed Chair next week.

After the CPI release, most U.S. Treasury yields fell less than 1 basis point. The two-year Treasury yield, which is more sensitive to near-term changes in monetary policy, stood at 4.11%, down from around 4.13% earlier in the session. Dan Carter, senior portfolio manager at Fort Washington Investment Advisors, said: "This gives the Fed a little bit of breathing room." (Jin Shi)