Jeff Rosenberg, senior portfolio manager at BlackRock Inc. ( BLK ) (NYSE:BLK) said Thursday that inflation pressures may actually be nearing a peak despite recent hotter-than-expected CPI and producer inflation reports that reignited fears of further Federal Reserve tightening.

Speaking on CNBC's "Closing Bell Overtime," Rosenberg said markets may be looking beyond alarming headline inflation figures because underlying inflation measures appear more stable.

"If you look inside the data today, it was actually a little bit better in the details," Rosenberg said, pointing to softer core PCE trends and easing tariff-related inflation pressures.

His comments came after U.S. consumer inflation rose to 3.8% in April from 3.3% in March, topping economist expectations and marking the hottest CPI reading since May 2023. Producer prices also surged more than expected, with headline PPI jumping 6% year-over-year in April, the highest level since late 2022.

Fed Outlook

The hotter inflation data pushed Treasury yields higher and sharply reduced expectations for near-term Federal Reserve rate cuts.

Still, Rosenberg said the bond market reaction remained relatively restrained because investors are focusing more closely on underlying inflation trends rather than headline energy-driven spikes.

He said short-term Treasury yields remain heavily tied to inflation expectations and Federal Reserve policy, while longer-term yields are increasingly being driven by structural financing pressures tied to fiscal deficits, AI infrastructure spending and global energy investment.

Rosenberg added that tariff-related inflation may begin fading in coming months, echoing recent comments from New York Fed President John Williams, who said existing tariff pass-through effects could gradually ease even as energy prices remain elevated.

Long-End Pressure

Rosenberg also warned that longer-duration government bonds could face continued pressure as rising borrowing needs push investors to demand higher "term premiums," or additional compensation for holding long-term debt.

He contrasted that with corporate credit markets, where investor demand has remained resilient amid strong liquidity and continued enthusiasm around AI-related growth.

The comments come as markets continue adjusting to a higher-for-longer rate environment following this week's inflation reports. According to CME FedWatch data cited earlier this week, traders are increasingly pricing in the possibility of another Fed rate hike by 2027.

Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.

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