Morning Rally Largely Erased. Why?

Bonds began the day in modestly weaker territory but quickly rallied after the CPI data.  The rally was informative, both in terms of its moderate size and high volume.  It reinforced our assumption that inflation data was back on the menu of big ticket market movers after taking a distant back seat to the jobs report. The initial reaction was short-lived though.  Gains only stuck around for the shortest-term bonds.  10yr yields ended up moving higher by several bps while MBS maintained modest gains thanks to their shorter implied duration (i.e. we continued to use 10yr Treasuries as a big picture rate benchmark, but MBS trade more like 5yr Treasuries these days). Rationale is in short supply for the selling because there were no clear, individual motivations.  Instead, we are forced to point to a slew of Fed speeches that were collectively more hawkish.  Beyond that, one might offer some conjecture about anticipated fiscal impacts from various political developments, but that narrative is certainly getting a bit tired at this point.