The bond market is selling off again, but Federal Reserve interest-rate cuts haven’t been canceled — perhaps just delayed.

The latest market tantrum came after the Labor Department reported that its core producer price index increased 0.5% in January from a month earlier, exceeding the consensus estimate of 0.1%. In the fed funds futures market, the data brought the expected odds of a May rate cut down to about 1-in-3. In all of 2024, the futures market now expects about three rate reductions, down from the six (and at one point nearly seven) that were implicitly expected in January.