The bond market took this report as a sign that core inflation may be bottoming and the Fed may still be in the tightening business later this year.

The bond market took this report as a sign that core inflation may be bottoming and the Fed may still be in the tightening business later this year,

The report is probably a shade on the weak side and it increases the chance that the Fed is more likely to stop raising rates at 4.75 percent at the middle of the year, rather than going higher.

The PPI number had some pipeline pressure underneath the surface, but the market liked the fact that the core rate was up only 0.1 percent,

The PPI number had some pipeline pressure underneath the surface, but the market liked the fact that the core rate was up only 0.1 percent.

Bond prices rose because the market was excited at the idea that the number of further rate hikes needed would not necessarily be large. The market is thinking that the Fed has two more rate hikes to go.