EDITOR'S NOTE
The numbers are in. Inflation was red hot in October.
Last month's consumer price index jumped 6.2% from a year ago, well above the 5.9% estimate from economists polled by Dow Jones. It was the largest annual increase in more than three decades. The index, which tracks a basket of consumer products, increased 0.9% on a month-over-month basis, also hotter than expected.
The yield on the benchmark 10-year Treasury surged after the CPI data was released Wednesday morning, sending technology stocks lower and lifting bank stocks.
All three major U.S. stock averages closed lower. The tech-heavy Nasdaq Composite and the S&P 500 both posted their worst daily performances since early October.  Following the CPI data, traders moved up their expectations for when the first Fed rate hike would occur. The Fed funds futures market now sees greater odds of the central bank's first full rate hike coming in July 2022.
The central bank earlier this month announced plans to start reducing its bond-buying program by the end of November while holding off on rate hikes until after tapering is complete.
October's hot CPI report and producer price reading released earlier this week "does support the idea that sometime before January, [the Fed] might adjust the pace of tapering to a faster pace," said Liz Ann Sonders, chief investment strategist at Charles Schwab.
"If they step up the pace, it means it would be complete sooner," Sonders said. "That's part of the reason why the market has started to price in at least two rate hikes in the second half of next year, if not three."
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Rabu, 10 November 2021
Stocks slide after hot inflation data | Bond yields spike | Fed rate hike by July 2022?
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