US yields rise, stocks fall as inflation data boosts odds of larger December rate hike
SPY•US Treasury yields jumped and Wall Street stocks fell after October consumer prices rose 0.4%, above economists’ 0.3% forecast, lifting expectations of a half-point Fed rate hike in December. The dollar strengthened, while gold and oil prices fell.
1. Inflation lifts rate expectations
US Treasury yields jumped and Wall Street stocks fell on Thursday after hotter-than-expected inflation data boosted the odds of a half-percentage-point Federal Reserve rate hike next month. The Consumer Price Index rose 0.4% in October, following a 0.6% increase in September, against economists’ 0.3% forecast. Core CPI rose 0.3%, above the 0.2% consensus.
2. Yields climb, stocks retreat
The two-year Treasury yield rose 19.28 basis points to 4.74%, while the 10-year yield gained 12.76 basis points to 4.988%. Dallas Fed President Lorie Logan said the central bank needs at least two more quarter-point rate increases to bring down inflation.
3. Dollar gains, commodities fall
The dollar index rose 0.6% to 102.29, while spot gold fell 2.3% to $4,043.73 an ounce. US crude declined 1.39% to $85.67 a barrel, and Brent fell 2.03% to $90.69.
