PCE inflation data painted a cooler picture than the most recent CPI report (the one that sent rates surging higher into mid-June).  So far this morning, it has helped lock in a relatively strong move in the European session overnight.  At the very least, if bonds end up losing ground today, it won't be due to an inflation surprise.  Both Treasuries and MBS are starting out at their best levels in more than 3 weeks.  Stocks have been able to bounce back from overnight weakness as tamer inflation means a less restrictive Fed, all other things being equal.

The PCE data increasingly confirms that inflation has peaked.  

Other measures of inflation make similar suggestions, including more timely metrics such as TIPS breakevens (Treasury inflation protected securities spreads vs actual Treasury yields), labeled as "inflation expectations" below.