Pour Herbert Lasho
nuevaNew YorkSeptember 30 – US Treasury bond yields fell on Friday after a key inflation reading rose higher than expected, suggesting the Federal Reserve will continue to aggressively raise interest rates to control prices.
* The personal consumption expenditure price index rose 0.3% last month after falling 0.1% in July. In the 12 months from August, the price index PCE According to the Commerce Department, it rose to 6.2 percent from the previous month’s 6.4 percent.
* However, excluding food and energy, the measure rose 0.6 per cent last month after remaining unchanged in July and the so-called price index. PCE The core increased to 4.9% in August after 4.7% in July.
* “Principal and Core were both pretty bad,” said Stan Shipley, fixed income strategist at Evercore SI in New York.
* Two-year note yields, which generally move in step with rate expectations, initially rose after the data but later fell 0.5 basis points to 4.165%. The gap between the two-year and 10-year bond yields, early signs of a slowdown, narrowed slightly to -46.9 basis points.
* Shipley said the reading is not high enough for the Fed to change its rate-hike campaign, though he said core inflation will ease over the winter. The bank has raised borrowing costs faster this year than at any time since the 1980s.
* “It is not a good thing that the Fed is taking a step back,” he said. “The Fed is going to move on.”
* The yield on the 10-year bond fell 4.7 basis points to 3.700%, and the yield on the 30-year note fell 3 basis points to 3.663%.