Treasury note reached 4.81%, its highest level in more than 16 years. The recent jump in interest rates across many parts of the bond market may reflect a confluence of events that have altered the investment landscape.Īt the start of October 2023, the yield on the benchmark 10-year U.S. Treasury note began closing in on 5% by early October. Find a financial advisor or wealth specialistĪfter spending most of the year below 4%, yields on the benchmark 10-year U.S.“The hikes in interest rates are beginning to bite into the economy and lower inflation as consumers become more frugal,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

Thursday’s report suggests those effects may now be kicking in. Dallas Fed President Lorie Logan cheered Thursday’s CPI data but said “there is still a long way to go.” REUTERSĬontinued high inflation for services, possibly reflecting labor markets that remain tight, could prevent any quick resolution of the overall inflation problem.īut the central bank at its last meeting also indicated it could take a step back from delivering interest rate hikes in such large chunks, and might take a more tempered approach as the economy adjusts to the “lagged” impact of monetary policy. “While I believe it may soon be appropriate to slow the pace of rate increases so we can better assess how financial and economic conditions are evolving, I also believe a slower pace should not be taken to represent easier policy.”įed officials have said they wanted convincing evidence that inflation was in decline before altering their approach, and still believe returning inflation to their 2% target will require keeping rates at a “restrictive” level for a potentially extended period of time. Still, she said, the current state of the economy can be summed up in just five words: Inflation is much too high. “This morning’s CPI data were a welcome relief, but there is still a long way to go,” new Dallas Fed President Lorie Logan said. Fed policymakers were quick to point out that their work is far from done. Rate futures contracts are pricing in a top policy rate in the 4.75% to 5% range next March - lower than the 5%-plus range seen before the report - and interest rate cuts in the second half of the year. Inflation cools slightly in October, but stiff prices send Fed scrambling APĪfter raising rates more sharply this year than at any time since the 1980s, including four straight 75-basis-point rate hikes that brought the policy rate to a range of 3.75% to 4% as of last week, the Fed is seen shifting to a half-point rate hike next month and quarter-point hikes after that. Futures contracts that settle to the Fed’s benchmark rate show traders expect the blistering pace of policy tightening to slow next month, pricing in about an 80% chance that Fed Chair Jerome Powell will deliver just a half-point rate hike. In the Treasuries market, the yield on the 2-year note, the maturity most sensitive to Fed rate expectations, dropped by nearly 20 basis points, the most in one day since June.Īnd traders in futures contracts tied to the Fed’s benchmark rate show traders now expect the blistering pace of policy tightening to slow next month. Though inflation remained high by historical standards, with prices increasing 7.7% from a year earlier, the monthly pace of “core” inflation that excludes volatile food and energy dropped by half, to 0.3% in October from 0.6% the month before.

October data published Thursday by the Labor Department showed key items like rents increasing less than expected, while the price index for used cars - a culprit in the initial, pandemic-related surge in inflation - declined by 2.4%, the fourth monthly drop. NY Times writer mocked for saying ‘inflation is over’ - if you exclude food, gas and rentĪ larger-than-expected slowdown in consumer inflation last month will likely let the Federal Reserve pare its rate increases as the impact of its monetary tightening may finally be showing up in the pace of price increases. Israel’s fatal mistake, ‘Not Trump’ GOPers flailing and other commentary

Big Apple squeeze: NYC homeowner costs rise nearly three times the inflation rateįed’s Jerome Powell says strong economy could require rate hikes: ‘Inflation is still too high’

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