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US CPI for August rose 0.4%m/m and 2.9%y/y, slightly hotter than expected while core CPI held at +0.3%m/m and ~3.1%y/y, with shelter and airline fares pushing headline inflation higher. UST10Y briefly dropped below 4.00% following the release but closed nearer ~4.02% as markets parsed mixed signals; UST2Y held relatively steady amid rising odds of a 25bp Fed cut, contributing to mild curve steepening. Despite sticky inflation, weak labor data and elevated jobless claims bolstered rate cut expectations, offsetting some hawkish concerns. Investors remain focused on Powell’s upcoming remarks and next week’s PPI and payroll revisions for clues on whether the inflation path is truly moderating or merely volatile.