What’s going on here?
US Treasury yields wavered as new data pointed to subtle disinflation and shifting jobless claims, causing changes in Federal Reserve expectations.
What does this mean?
Treasury yields had mixed reactions to recent economic indicators. The Consumer Price Index (CPI) nudged up 0.2% in September, the smallest annual inflation rise since February 2021. Meanwhile, core CPI – excluding food and energy – increased 0.3%, marking a 3.3% annual climb. Jobless claims also rose, impacted by Hurricane Helene and a dockworkers’ strike. These trends suggest a 91% chance of a 25-basis point Fed rate cut in November, indicating shifting market sentiment. The US yield curve steepened, favoring steepener trades for investors expecting restrained Fed easing.
Why should I care?
For markets: Keeping a pulse on economic shifts.
The mixed inflation and jobless data are shaping Treasury yields and Fed policy expectations, making it…
