Today is inflation day, as can happen on the occasional month. The US CPI came in without signs of acceleration despite the relinquishment of the Verizon effect on the statistical bucket. Financial markets are unenthused by all this, but you might not know why.

The spread between 5- and 30-year Treasury yields, as well as the gap for 2- and 10-year maturities, tumbled Wednesday to the lowest levels since 2007, at 37.2 basis points and 45.7 basis points, respectively. The flattening accelerated after consumer price index data came in largely as expected, perhaps bringing other market-moving events, like President Trump’s threat of a missile attack on Syria, into focus. “CPI, or any other economic data release, is a back-burner item when you have so much geopolitical risk on the forefront,” Tom di Galoma, managing director of government trading and strategy at Seaport Global Holdings, said in an email.

Or, the CPI behaving as expected (now) is contrary to the narrative that has been hammered on for month after month. Scarcely a market piece on inflation was written and published that didn’t include the words “labor” and “shortage” while at the same time referring to the unemployment rate as definitive in all cases. Enough time has passed for the bond market (long end) to at least pause and wonder what all the fuss was about. At some point, the boom has to boom; or had to have.

This is, obviously, more than a question for the US economic system and its authorities. I noted earlier this week the European contribution that behaves as if “somehow” directly connected to the rest of the world, including the United States. On the other side of the globe, China also reported its inflation indices for March today, too.

Last month, for February 2018, China reported its CPI had jumped to a four and half year high. Easily explained as the base effects of food prices, the latest estimates for March were even lower than perhaps should have been taking that into account. Year-over-year, the index gained just 2.1%, still considerably below the 3% official target for all of those four and a half years.

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