Article: Treasury Yields Rise as Oil Jump Adds to Inflation Concerns According to this article, we are
Question:
Article: Treasury Yields Rise as Oil Jump Adds to Inflation Concerns
According to this article, we are not out of the water yet in terms of inflation. The annual interest rate that the U.S government pays on its debt obligations is continuing to rise. This is due to oil prices rising. This will continue to keep inflation elevated, which is definitely going to put pressure on the Feds to continue to raise interest rates.
The two-year US yield rose as much as 11 basis points to 2.73% as crude prices jumped after OPEC announced a surprise oil production cut over the weekend. This reignited concern about inflation and led traders to price in a higher terminal rate for the Feds.
The high oil prices are a reminder that the U.S is not in the clear when it comes to inflation. Since inflation is likely to remain the biggest driver of the Fed's monetary policy, the market will be less likely to assume an early shift to lower rates or a faster pace of rate cuts.
How can the Treasury yield stop rising due to oil prices raise inflation?
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts