🚨 The CPI just gave the Treasury market a reason to worry...
#cpiwatch
The U.S. inflation report for September is out.
Headline CPI rose 0.6% month over month and 3.7% year over year. Core CPI also came in hotter than expected: 0.3% month over month and 2.6% year over year.
Gasoline prices jumped 9.1%, accounting for more than half of the monthly increase in CPI.
But here’s the detail that matters: housing and services prices also rose. This wasn’t just an energy shock.
The bond market reacted.
The 2-year U.S. Treasury yield climbed 7.2 basis points to 4.87%, while the market-implied probability of a Fed rate hike in October rose from about 20% to 41%.
Meanwhile, Brent is still near $106 as tensions in the Middle East threaten oil supplies.
My interpretation: Treasuries will face greater pressure if inflation remains persistent, because rising yields push down the prices of bonds that have already been issued.
But I wouldn’t blindly chase the rise in oil. Its next move will depend on actual supply disruptions, not just today’s CPI report.
My approach: watch whether Treasury yields keep rising and whether Brent’s supply-risk premium persists. These signals matter more than a single dramatic candle.
Does this inflation report mark the start of another rise in yields, or will the energy shock prove temporary?
This is not financial advice.
$BZ
$CL
$TMF
#cpiwatch #CPI #Inflation
#cpiwatch
The U.S. inflation report for September is out.
Headline CPI rose 0.6% month over month and 3.7% year over year. Core CPI also came in hotter than expected: 0.3% month over month and 2.6% year over year.
Gasoline prices jumped 9.1%, accounting for more than half of the monthly increase in CPI.
But here’s the detail that matters: housing and services prices also rose. This wasn’t just an energy shock.
The bond market reacted.
The 2-year U.S. Treasury yield climbed 7.2 basis points to 4.87%, while the market-implied probability of a Fed rate hike in October rose from about 20% to 41%.
Meanwhile, Brent is still near $106 as tensions in the Middle East threaten oil supplies.
My interpretation: Treasuries will face greater pressure if inflation remains persistent, because rising yields push down the prices of bonds that have already been issued.
But I wouldn’t blindly chase the rise in oil. Its next move will depend on actual supply disruptions, not just today’s CPI report.
My approach: watch whether Treasury yields keep rising and whether Brent’s supply-risk premium persists. These signals matter more than a single dramatic candle.
Does this inflation report mark the start of another rise in yields, or will the energy shock prove temporary?
This is not financial advice.
$BZ
$CL
$TMF
#cpiwatch #CPI #Inflation