Core CPI vs U.S. 10 Year Yield, Something Has to Give

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Something Has to Give Here

In recent years as core CPI has trended this high, the U.S. 10 Year Treasury’s yield has ranged between 2.50% and 2.90% vs. 1.56% today.  This week’s data is pointing to higher bond yields coming at markets near you.

Fed Might Still Manage 1, 2 Hikes This Year, Lockhart Says -Rtrs

Federal Reserve Bank of Atlanta President Dennis Lockhart says in interview with Reuters that there’s no real argument about inflation, and only a modest one over the financial stability implications of continuing to leave rates so low.

  • “Committee is much tighter in its array of opinion, and the differences between points of view are more nuanced and more related to sooner versus a little later on questions of policy”

Friday, we found American consumers moved into a higher gear in the second quarter, spending at the fastest quarterly pace in two years, retail sales figures will probably show on Friday. Economists project a 0.3 percent gain in core sales for June, which would take the three-month annualized gain in the so-called retail control group to 6.6 percent barring revisions. The figure is used to calculate gross domestic product and excludes food services, auto dealers, home-improvement stores and gas stations. – Bloomberg

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CPI vs 10s

The U.S. Bureau of Labor Statistics reported that year over year Core CPI (consumer price index) for June rose to 2.3 percent versus 2.2 percent May. Year over year CPI was 1.0 percent versus 1.0 percent in May. On the month CPI in June rose 0.2 percent, the same as May.
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