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Inflation fears.
Interest rates rose Friday after inflation component of Jan consumer sentiment report with 5-year #inflation expectations rising to 3.1%, highest level since 2011.
10-yr yield +6bp to 1.77%,
2-yr yield +7bpto 0.96%Interest rates rose despite retail sales for December, industrial production and capacity utilization for December, and preliminary consumer sentiment for January decreasing on a month-over-month basis.
Credit Suisse on Friday downgraded global equities to “benchmark” rating from “overweight”, citing the need for the U.S. Federal Reserve to raise interest rates above market expectations amid higher wage growth in the United States.
The brokerage, which cut its rating on global equities for the first time since the peak of the pandemic, said the Fed rates need to be at 1.7% for 2022, in line with market estimates. By the end of 2023 it sees the need for the rates to be at 2.5%, which is above market expectations.
“The Fed has met its twin targets of maximum employment and 2% average core PCE, hence policy should be neutral,” Credit Suisse Analyst Andrew Garthwaite said.
US CPI in February rose 0.8% m/m (consensus +0.8%). Core CPI rose 0.5% (consensus +0.5%). On a year-over-year basis, total CPI is up 7.9% (versus 7.5%
[See the full post at: Inflation Surging Higher in February US CPI +7.9% y/y largest Increase since Feb 1982]
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