Hotter-than-expected October CPI data of 0.4% has triggered a sell-off in equities and Bitcoin, while Treasury yields surge as markets price in a potential 50-basis-point Fed rate hike for December.
The hotter-than-expected CPI (0.4% headline, 0.3% core) confirms a December rate hike is assured and puts a 50-basis-point move on the table, pushing yields sharply higher. The article reports the 10-year yield up 6.5 basis points to 4.93% and the 2-year up 14 basis points to 4.69% as traders price in the larger hike scenario.
The October CPI beat forecasts at 0.4% headline and 0.3% core, making a December Fed rate hike all but certain and even opening the door to a 50-basis-point move. Higher rates weigh on risk assets, and the article reports Bitcoin already adding to losses, dipping about another 1% to $73,600. Earlier ETF outflows and MARA's sales add to the selling pressure described in the article.
The stronger-than-expected October CPI (0.4% headline, 0.3% core) cements a December Fed hike and raises the odds of a 50-basis-point move, which hits rate-sensitive growth stocks hardest. The article reports Nasdaq 100 futures turned decidedly lower, down 1.15% after the print. Higher Treasury yields, with the 2-year up 14 basis points, add to the pressure on equities.
October CPI rose 0.4% against forecasts of 0.3%, and core rose 0.3% against 0.2%, setting up a December rate hike that Waller suggested could even be 50 basis points. The article reports S&P 500 futures fell 0.5% after the release, with the 10-year yield up 6.5 basis points to 4.93% providing further headwind for equities.
The October CPI beat at 0.4% headline and 0.3% core makes a December Fed rate hike certain, with Governor Waller even suggesting a 50-basis-point move could be appropriate. The prospect of higher U.S. rates is directly supportive of the dollar, with the 2-year yield already up 14 basis points to 4.69% on repriced Fed expectations.
The U.S. Consumer Price Index rose 0.4% in October, exceeding forecasts of 0.3% and cementing expectations for a Federal Reserve rate hike in December. Fed Governor Chris Waller suggested a 50-basis-point increase may be appropriate, driving the 2-year Treasury yield up 14 basis points to 4.69% and weighing on risk assets.
Because inflation came in above forecasts, a December Fed hike is now seen as certain and traders are pricing a small chance of a 50-basis-point move, lifting the 10-year yield 6.5 basis points to 4.93%.
Inflation came in hotter than forecast, all but locking in a December Fed rate hike and possibly a larger 50-basis-point move, which sent Bitcoin down about another 1% to $73,600.
Index futures turned lower, with the Nasdaq 100 down 1.15% and the S&P 500 off 0.5%, because the hot CPI makes a December rate hike, and possibly a 50-basis-point one, highly likely.
It makes a December Fed rate hike virtually certain and lifts Treasury yields, with S&P 500 futures already 0.5% lower after the report.
The hotter-than-expected CPI all but guarantees a December Fed rate hike and raises odds of a larger 50-basis-point move, which is supportive for the dollar.