1min snip

Bloomberg Surveillance cover image

A Breakdown of CPI and Outlook for Rates

Bloomberg Surveillance

NOTE

Effects of Rising Real Yields on American Business

A 4.53% five-year real yield increases the cost of financing for American businesses, challenging the Fed's expectations for neutral rates. The strong jobs growth and higher inflation suggest that the Fed's neutral rate projections are too low, further cementing this viewpoint over time. Notable cost increases like the 22% rise in car insurance from a year ago reflect the impact of rising yields on various sectors.

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