Published Wed, 16 May 2018 08:15:42 -0400 on Seeking Alpha
The benchmark 10-year Treasury yield edged up to 3.08% on Tuesday (May 15), marking a new seven-year high, based on daily data published by Treasury.gov. The implied inflation forecast via Treasuries continued to advance as well, signaling that the market is pricing in firmer pricing pressure in the months ahead.
Notably, the yield spread between the nominal 5-year Treasury less its inflation-indexed counterpart ticked up to 2.15%, the highest since 2013. The rise suggests that the crowd anticipates that the official inflation indexes will continue to trend higher - a development that would likely reaffirm and perhaps accelerate the Fed's current program of tightening monetary policy.
The April report on consumer price index (CPI) confirms that pricing momentum is heating up, albeit following a period of subdued inflation. In a sign of the times the CPI's headline and core readings simultaneously posted year-over-year increases above 2% - the Fed's inflation target - for a second month. That's the first time that headline and core indexes have been that high in more than a year.
For the moment, a mildly hotter level of inflation isn't worrisome, in part because the upswing coincides with expectations for stronger economic growth. Several estimates of US GDP growth for the second quarter are projecting a rebound after a subdued gain in Q1. Yesterday's April data on retail spending offers support for thinking positively as consumer... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|VANGUARD EXTENDED DURATION TREASURY ETF||109.16||0.0||0.00||0.00||2.99|
|SPDR BARCLAYS CAPITAL 1-3 MONTH T-BILL ETF|
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