Treasury rally signals growth fears outweigh inflation concerns, Siebert says
TLT•Siebert Financial's analysis said investors appeared more concerned about slowing growth than inflation, as the 10-year Treasury yield fell roughly nine basis points to around 5.09%. September producer prices rose 1.3%, versus 0.6% expected.
1. Treasury yields fall
Siebert Financial's bond-market analysis said the decline in the 10-year Treasury yield signaled demand for safety despite an unexpectedly sharp increase in producer prices in September.
2. Producer prices rise
Producer prices rose 1.3%, compared with 0.6% expected, while core PPI increased 0.7%, exceeding the 0.3% forecast. Gasoline retailers' margins fell 30.3% in September.
3. Inflation risks remain
The analysis said companies with pricing power appeared better positioned to withstand rising costs. It cautioned that Treasury yields could face renewed upward pressure if risk sentiment improves while inflation remains elevated.
