FT News Briefing Inflation prompts investors to ditch Treasuries
Feb 11, 2022
A recent spike in U.S. inflation has marked the highest consumer prices in four decades, prompting investors to abandon Treasuries. Meanwhile, SoftBank faces legal hurdles jeopardizing its plans for an Arm IPO due to management issues in China. In a scientific breakthrough, European researchers have made significant strides in nuclear fusion, potentially paving the way for sustainable energy. These developments reflect the evolving challenges and innovations in the global economy and energy sector.
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SoftBank's Arm IPO in Jeopardy
- SoftBank's plan to list Arm faces challenges due to a legal battle in China.
- The head of Arm's China joint venture, Alan Wu, launched multiple lawsuits and refused to leave his position.
US Inflation Surge
- US inflation surged to 7.5% in January, the fastest annual pace in 40 years.
- This caused stocks to drop and treasury yields to rise significantly.
Investors Ditch Treasuries
- Investors are dumping government bonds due to high inflation, pushing the 10-year treasury yield up to 2%.
- There's uncertainty about when inflation will level off, and the Fed's actions might exacerbate the problem.