September U.S. CPI is here: How will crude oil and Treasuries fare? #9月CPI来袭原油美债走势如何
Data released by the U.S. Department of Labor on October 14 showed that September CPI rose 3.7% year over year, while core CPI rose 2.6%. Both exceeded expectations, and the 0.6% monthly increase was the largest in five months.
Energy was the real engine: gasoline prices surged 9.1% month over month, accounting on their own for more than half of that month’s CPI increase. The energy index rose 5.2% month over month, far above August’s 2.1%. As the U.S.-Iran conflict continues to escalate, rising oil prices are filtering through transportation and chemical costs into a broader range of goods and services.
Once this chain reaction takes hold, inflation shifts from a one-off shock to a persistent problem. Markets immediately raised the odds of a 25-basis-point Fed rate hike in October from 21.6% to 43.7%, while the probability of a hike by year-end climbed above 96%.
U.S. Treasuries swung from “first dumped, then snapped up”: the moment the data came out, the 10-year yield surged from 5.17% to above 5.32%, with shorter-term yields reacting even more sharply.
But after three Fed officials said in quick succession that there was “no need to rush,” and a sharp global stock-market selloff triggered safe-haven buying, yields fell below 5.10% the following day, hitting a three-week low. Treasuries gained nearly 0.7% in October, putting them on track for their best October since 2014.
Long-term yields are now being pulled back and forth between “sticky inflation + a massive supply of government bonds” and “slowing growth + safe-haven demand.”
Crude oil, meanwhile, is caught in a bind, suffering from the fire it helped ignite: WTI is consolidating near $94 and Brent near $105, while the Brent-WTI spread has widened to more than $11.50. At its core, this reflects the market’s pricing of shipping risks in the Gulf and the Red Sea.
The reflexive cycle works like this: higher oil prices push up CPI, higher CPI reinforces rate-hike expectations, and a stronger dollar and downward revisions to demand expectations then feed back to weigh on oil prices. WTI has already fallen about 7% over the past month from its mid-September peak.
Risk assets ultimately bear the cost: high interest rates weigh on valuations, with AI stocks that rely on financing to fuel expansion taking the first hit. Emerging markets, meanwhile, face the double squeeze of capital outflows and imported inflation.
Data released by the U.S. Department of Labor on October 14 showed that September CPI rose 3.7% year over year, while core CPI rose 2.6%. Both exceeded expectations, and the 0.6% monthly increase was the largest in five months.
Energy was the real engine: gasoline prices surged 9.1% month over month, accounting on their own for more than half of that month’s CPI increase. The energy index rose 5.2% month over month, far above August’s 2.1%. As the U.S.-Iran conflict continues to escalate, rising oil prices are filtering through transportation and chemical costs into a broader range of goods and services.
Once this chain reaction takes hold, inflation shifts from a one-off shock to a persistent problem. Markets immediately raised the odds of a 25-basis-point Fed rate hike in October from 21.6% to 43.7%, while the probability of a hike by year-end climbed above 96%.
U.S. Treasuries swung from “first dumped, then snapped up”: the moment the data came out, the 10-year yield surged from 5.17% to above 5.32%, with shorter-term yields reacting even more sharply.
But after three Fed officials said in quick succession that there was “no need to rush,” and a sharp global stock-market selloff triggered safe-haven buying, yields fell below 5.10% the following day, hitting a three-week low. Treasuries gained nearly 0.7% in October, putting them on track for their best October since 2014.
Long-term yields are now being pulled back and forth between “sticky inflation + a massive supply of government bonds” and “slowing growth + safe-haven demand.”
Crude oil, meanwhile, is caught in a bind, suffering from the fire it helped ignite: WTI is consolidating near $94 and Brent near $105, while the Brent-WTI spread has widened to more than $11.50. At its core, this reflects the market’s pricing of shipping risks in the Gulf and the Red Sea.
The reflexive cycle works like this: higher oil prices push up CPI, higher CPI reinforces rate-hike expectations, and a stronger dollar and downward revisions to demand expectations then feed back to weigh on oil prices. WTI has already fallen about 7% over the past month from its mid-September peak.
Risk assets ultimately bear the cost: high interest rates weigh on valuations, with AI stocks that rely on financing to fuel expansion taking the first hit. Emerging markets, meanwhile, face the double squeeze of capital outflows and imported inflation.