Post #15949

CPI Is Behind Us. Now Watch Yields For Clues The U.S. 10-year yield is edging higher again, up to 4.18%, marking a second straight gain and sitting near a one-month high. The driver is still the Iran war’s spillover into oil: even with brief relief on reserve-release headlines, crude remains elevated, keeping the market focused on an energy-driven inflation rebound. February CPI came in as expected—stable, but still above target—while the full impact of the oil surge hasn’t shown up in the data yet. With that backdrop, the Fed is expected to hold rates steady next week, and the market has repriced cuts down to roughly one 25bp cut, possibly in September, versus around 2.5 cuts before the war. US10Y is showing upside pressure in yields. Remember, bond prices and yields move inversely: when Treasuries are bought, prices rise and the fixed coupon implies a lower yield; when they’re sold, prices fall and the same coupon implies a higher yield. Watch yields for direction on the dollar. - Alan