Weak CPI and Q3 Earnings

September 17, 2018

Weak CPI and Q3 Earnings Photo

Last week saw the consumer price index (CPI) surprise to the downside by 0.1%. The miss in expectations was taken in stride by the bond market, however, as longer term yields continued to grind higher, leading the 10-year Treasury to end the week just below the key 3% level. My expectation is that yields will continue to rise into next Wednesday’s Fed rate decision. It is almost certain at this point that the Federal Reserve will raise rates, but the market is eagerly awaiting future guidance. 

Economic releases in the U.S. are light this week, with an emphasis on housing data. I will also be watching third quarter earnings reports closely, which start to pick up this week. With stocks trading near the highs, earnings could be a catalyst to boost them further over the next few weeks.

Tags: Consumer Price Index | Federal Reserve | Interest Rates | 10-Year Treasury | corporate earnings

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