Bond Market Keeps Inflation Expectations Elevated After CPI Data
- Gauge closely watched by Fed shows sticky inflation pressures
- Swaps market sees Fed’s rate holding over 5% all year
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Bond traders are keeping their expectations for medium-term US inflation at elevated levels as signs of persistent price pressures suggest the Federal Reserve has more to do in terms of tightening policy.
While the rise in the consumer price index for January matched consensus estimates, revisions left year-on-year rates higher than economists expected. The report showed disinflationary momentum in core goods is flagging. And the so-called super-core figure — or core services minus housing, an indicator watched closely by Fed Chair Jerome Powell — was sticky, increasing at a slower 0.27% pace for the month but running at a 6.2% pace from the prior year.