(Bloomberg) — Nothing has been setting the US bond market’s direction this year more than the monthly inflation figures. This week will be no exception.
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The release of the April consumer-price index on Wednesday is poised to provide the biggest test yet of the rally that started this month when Federal Reserve Chair Jerome Powell swatted away worries that the central bank may raise interest rates again. It gained steam after the Labor Department reported a slowdown in job growth, and those gains continued into Monday, with rates down about 1 basis point across the curve as of 8:12 a.m. in London.
The advance has increased the stakes in the upcoming inflation data — which could either extend it or doom it as another ill-fated turnaround. Bank of America Corp. strategists said the market will be in a “holding pattern” until then.
This year’s previous CPI reports fueled bond-market selloffs as…
