{"text":[[{"start":10.011,"text":"US Treasuries sold off sharply on Tuesday, sending short-term yields up by the most in two years, after stronger than expected inflation data sparked fresh bets that the Federal Reserve will increase interest rates next month."}],[{"start":22.76,"text":"Tuesday’s consumer price index figure from the Bureau of Labor Statistics was up 0.4 per cent in October versus the previous month. That was less than the month-on-month rate of 0.6 per cent in September but ahead of expectations of 0.3 per cent in a Bloomberg poll of economists."}],[{"start":41.28,"text":"Core inflation, which strips out volatile food and energy prices, came in at 0.3 per cent, unchanged from its September and August levels. Economists had expected it to fall to 0.2 per cent."}],[{"start":54.16,"text":"The BLS did not release an annual rate of inflation figure for October after a government shutdown last year prevented it from collecting data during the corresponding month in 2025."}],[{"start":64.66,"text":"Robert Sockin, chief economist at PGIM, said the data confirmed the US economy was in a “hot inflation environment” and would push the Fed to be more “aggressive” in its approach to interest rates."}],[{"start":76.44,"text":"“If you look at the last six months, inflation is showing no signs of improving and in some cases worsening,” he said. “This is not an environment for gradualism.”"}],[{"start":null,"text":"
"}],[{"start":85.92,"text":"The data prompted traders to increase wagers for the central bank to tighten monetary policy when it meets next month, in turn putting US government debt on track for its biggest one-day sell-off in more than two years."}],[{"start":98.02,"text":"The yield on two-year Treasuries, which are sensitive to changing rate expectations, jumped after the data was released as the bonds sold off, rising as much as 0.22 percentage points on the day to 4.78 per cent. If maintained, this would be the biggest one-day jump in yields since October 2024. The yield on the benchmark 10-year Treasury topped 5 per cent for the first time this month."}],[{"start":122.48,"text":"The sell-off in bonds meant the Treasury department on Tuesday auctioned off $42bn of new 10-year notes with a 5 per cent coupon, the highest rate the US has paid since 2006."}],[{"start":134.32,"text":"Demand was relatively strong thanks to the large concession to investors, with dealers — the big banks that are counterparties to the government in these transactions — taking 10 per cent of the auction, versus an average 12 per cent."}],[{"start":146.88,"text":"The data comes as the Fed debates how to tackle stubbornly elevated inflation, triggered by the Iran war and the rush to procure AI chips and servers. The central bank was already tipped to raise rates by 0.25 percentage points when it meets next month, having increased them for the first time in more than three years in September to a range of to a range of 3.75 per cent to 4 per cent."}],[{"start":170.04,"text":"Fed governor Christopher Waller warned ahead of the data that if core inflation did not cool, the central bank should consider raising rates by 0.5 percentage points next month, advocating the first such “jumbo” increase since 2022. If the core reading remained at 0.3 per cent, he said, “hiking only 25 basis points would put our credibility at risk”."}],[{"start":null,"text":""}],[{"start":192.48,"text":"Dallas Fed president Lorie Logan also hinted on Tuesday that she could back more radical action on rates, suggesting that it “may be possible to move more rapidly this winter than the [Federal Open Market Committee] has moved so far this fall”."}],[{"start":205.8,"text":"Following Tuesday’s data, futures markets moved to price in a small 12 per cent chance of a half-point rate increase from the Fed next month, according to CME Fed Watch. The odds of a quarter-point rise increased to 88 per cent from 84 per cent, while bets the central bank would stand pat fell to zero."}],[{"start":223.24,"text":"Jeff Schulze, head investment strategist at the Franklin Templeton Institute, said: “Today’s hot October core CPI print leaves a December rate hike all but signed, sealed and delivered after governor Waller’s notably hawkish remarks.”"}],[{"start":236.583,"text":"US inflation has been elevated for much of the year, propelled higher by the Iran war, tariffs and the AI construction boom. High prices helped spur a landslide win for the Democratic Party in US midterm elections last week, as voters lashed out at President Donald Trump."}],[{"start":253.32,"text":"Tuesday’s data showed the cost of petrol, electricity and food rose in October versus the previous month, as did transportation services, car insurance and medical care."}],[{"start":263.12,"text":"George Brown, senior economist at Schroders, said Tuesday’s data “adds to evidence that the US economy is running too hot for comfort” and “leaves the Fed with more work to do”."}],[{"start":273.04,"text":"Daniel Siluk at Janus Henderson said that while it “cements the case for a December rate hike” there was still a “high bar” for a half-point increase."}],[{"start":287.08,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1794354370_7719.mp3"}