July inflation was “only” 8.5% year-on-year vs. 9.1% year-on-year in June, mainly because energy prices fell on the month. In the hope that fading inflation would slow the Federal Reserve’s monetary tightening, the 30-year US Treasury bond yield dropped – for about 10 minutes.

Traders decided that the light at the end of the tunnel was probably the headlamp of the oncoming express, and the 30-year bond yield snapped back.

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