Core CPI is 0.3% on a monthly basis, exceeding market expectations by 0.2% – a subtle but deadly number. Because what the Federal Reserve really anchors is not the level of annual data, but the direction and speed of month month-to-month. When the monthly pace of core inflation re-intensifies from 0.2% to 0.3%, it means that the annualized core inflation implicit rate returns to over 3.6%, far from the 2% target
Two Rounds of Treasury Buybacks, and Long-End Yields Still Hit a New High?
The Treasury bought 20- to 30-year debt again Wednesday, capped at $6B — second round in two weeks; the first filled only $5.2B. The bid came, yields didn't fall: the 10-year closed at 5.11%, up 15bp and the highest since 2007, as was the 30-year. October Fed hike odds hit 69.7%. Stocks fell: Nasdaq -1.13% to 26,936.04, erasing Tuesday's record; QQQ -0.84% to $741.21; S&P 500 -0.75% to 7,706.03; Dow -0.68% to 51,511.59. Bulls say firm data, not weak demand, is lifting yields; bears say two buybacks and a new high prove the bid can't absorb supply. At what yield do you redo the math on stocks?
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