Inflation Heading Higher

CPI comes in higher than expected

Consumer Inflation came in at 0.4% on the month and 3.7% year over year, according to a Labor Department. This is higher than estimates of 0.3% and 3.6%. Minus out food and energy prices because the skew the “numbers” (ridiculous), core CPI increased 0.3% for September and 4.1% year over year, inline with expectations.

Folks inflation has been on the rise since June. 10yr Treasury is at 4.614% at 7:42 am this morning will likely continue higher towards 4.80% which means further increases in inflation. Borrowing cost, corporate refinancing will continue to push debt service levels higher.

US 10 YR Treasury Daily Chart

US 2YR Treasury Daily Chart

Inflation will continue to be the driving factor behind the Fed’s rate hike decisions. Until they see 2%, expect life to be more expensive.

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