Treasury Rates: As of August 11th, 2022

Daily changes in the US 10 Year Treasury rates are the blue bars while the red line is the 14-day cumulative change in rates: 19bp INCREASE. For the blue bars, it is unusual to have changes of greater than 0.10 in a single day and 0.20 is VERY unusual.

 

With the strong Net New Monthly Jobs report, 8.5.22 longer-term rates increased more than shorter-term rates.


The Yield Curve for short terms remains steep while the longer term (5+ years) remains INVERTED. Could we be in for a short-term period of stagflation? It will take at least 12 months for the Energy Prices to “fall” out of the CPI 12-month rolling calc. In the meantime, we can have a slowing economy with higher interest rates while the Fed fights inflation. This is what an inverted yield curve is pointing to. While CPI was down on 8.10.22 CORE components are likely to be higher even though energy prices are declining.


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