High inflation is already testing the US monetary policy

Significant market adjustments occurred on Wednesday and Thursday, as the US headline inflation was recorded at a 10-year high. The US consumer price index grew by 4.1% y/y in April and by 0.8% m/m, highlighting that the base effect from last year’s recession is not responsible for this acceleration in US inflation. Unsurprisingly, bond yields jumped, with the US 10 year benchmark touching 1.7% on Thursday and returning to 1.65% on early Friday. The Eurodollar remained volatile after its downward correction, which maintained nominal yields across Europe and the US to comparable levels. Finally, growth stocks, such as US tech, experienced a significant downward correction as future cashflows were increasingly discounted, due to a rise in inflation expectation, as the 5y spread between inflation-adjusted and nominal breached the 2.5% level. 

equity down
Share this news :

You might also read :

ES-oil
January 11, 2021

Risk on Chinese demand

Brent prompt contract reached 56 $/b on Friday close for Brent prompt contract thanks to the aggressive Saudi production cut announced last Tuesday. Prices retreated…
Join EnergyScan

Get more analysis and data with our Premium subscription

Ask for a free trial here

Subscribe to our newsletter

🏆 You like our solution ?

Vote for us at the 2024 Energy Risk Commodity Rankings, in the Research category!

Thanks in advance.

Don’t have an account yet? 

[booked-calendar]