Sticky Inflation Pushes Rates Up

Data came out that inflation is stubbornly stuck over 3% yesterday, which caused a spike in treasury yields across the spectrum. Market watchers are not sure if this is just a bump in the road on a downward trend in inflation, or if it is indicative of more persistent, economic issues.

If it’s just an anomaly, we may still see cuts in a few months from the Fed, but if it’s a persistent, higher than desired rate of inflation, then rate cuts may well be off the table for the rest of the year.

The market reacted significantly yesterday with Treasury yields jumping. DCF income rates went up accordingly and sharp-eyed customers will see that our prices dropped across-the-board on our inventory as rates moved up.

Higher inflation is bad for everyone but higher rates are welcome news for investors seeking long-term safe assets. It’s a great time to lock in income or lump sums that fill a wide range of investment needs.

Take a look at the inventory today. To read more about the market, here’s a quote and a link from the Wall Street Journal.

A second possibility is that inflation, rather than on a “bumpy” path to 2%, is getting stuck at a level closer to 3%. Without evidence that the economy is slowing more notably, that could scrap the case for cuts altogether.