Treasury yields jumped on Tuesday after October U.S. consumer price index data came in hotter than expected. Fed Governor Christopher Waller said a 50 basis point hike should be considered in December if inflation readings run high.
Treasury yields jumped on Tuesday after the U.S. consumer price index for October came in hotter than expected. The 10-year Treasury yield rose more than 7 basis points to 4.938%, while the 2-year yield climbed more than 15 basis points to 4.698%.
Inflation tops forecasts
The consumer price index grew 0.4% in October, above the 0.3% that economists polled by Dow Jones expected. The September reading was 0.6%.
Core CPI, which excludes volatile food and energy prices, gained 0.3%. Economists had expected 0.2%, and the reading matched September's 0.3% rise.
Waller floats a larger hike
The data followed comments from Waller, who said he would support stronger action if inflation readings are higher than expected. He said a 50 basis point hike in the policy rate should be considered at the December meeting. According to CNBC, he added: "Hiking only 25 basis points would put our credibility at risk".
Markets had largely priced in a 25 basis point hike in December, according to CME Group's FedWatch. Wholesale inflation numbers due Friday may also shape the Fed's decisions on rates.
Oil slips below $90
Brent crude fell below $90 a barrel on Tuesday morning for the first time since August. President Donald Trump said the war with Iran could end fairly soon and played down the prospect of further strikes.
Separately, U.S. employment data last week showed 165,000 jobs added in October, more than double forecasts.
Source: CNBC
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