New York Federal Reserve Building. Photo: Reuters/Keith Bedford

The US core Consumer Price Index rose just 0.1% in April vs. a 0.2% expectation, or a 1.2% annual rate as opposed to a 2.4% annual rate.

Bond yields fell on the news, with so-called breakeven inflation (the difference between inflation-indexed government bond yields and unindexed yields) down 0.2%. Tame inflation is important to a data-dependent Fed.

The biggest question in the financial world is whether the Federal Reserve will raise rates faster than the languid pace the market now expects. One month’s inflation data is just that, but there’s nothing in the data that would push the Fed to accelerate tightening.