CPI Comes In Hot As Bond Market Flashes Recession Signal

August 13, 2019

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CPI Comes In Hot As Bond Market Flashes Recession Signals — *Image by* *Jm3*

The Consumer Price Index came in hot for July YoY at 1.8% vs consensus estimate of 1.7%. Ex food and energy the number YoY was 2.3% vs 2.2% consensus. Month over month ex food and energy the number was 0.3% vs 0.2% consensus. Month over Month the number was 0.3%

Bond yields continued to flatten on the long end of the yield curve; the development has historically been seen as a leading indictor of a recession when the curve inverts. The Argentine situation, as well as trade tensions, and the explosive protests in Hong Kong, have all impacted the bond market as investors seek shelter in USD denominated assets.

The 10-year Treasury note yield TMUBMUSD10Y, +0.67% was down 0.6 basis point to 1.634%, its lowest since Oct. 2016, while the 2-year note rateTMUBMUSD02Y, +1.52% was virtually unchanged at 1.575%. The 30-year bond yield TMUBMUSD30Y, -0.96% fell 2.5 basis points to 2.105%, inches away from its all-time low of 2.09%. Debt prices move in the opposite direction of yields, wrote MarketWatch.

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