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Treasuries: Fed rates awaiting 10-year turnaround from record 2019, BlackRock: ‘central banks with their hands tied’

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Treasuries: Fed rates awaiting 10-year turnaround from record 2019, BlackRock: ‘central banks with their hands tied’

On the eve of the Fed’s announcement of what will be the first rate hike since 2018, Treasury rates are turning around. Yesterday ten-year yields had flown up to 2.16%, the highest value since May 2019, according to data from Refinitiv. Yields on 30-year Treasuries have dropped to 2.448% today. Jean Boivin, head of the BlackRock Investment Institute, commented to CNBC that central banks have their hands tied right now, and are forced to raise rates, due to rising inflation and, in particular, energy prices.

Today from the US macroeconomic front, the data relating to US inflation for the month of October, measured by the producer price index, was released.

The figure rose by 10% on an annual basis, as expected, at the same pace as in January (figure revised upwards from + 9.7% in January previously disclosed).

On a monthly basis, the PPI index slowed advanced 0.8%, less than the estimated + 0.9%.

Excluding the more volatile components represented by the prices of food and energy goods, core inflation rose by 8.4% on an annual basis, less than the estimated + 8.7%. On a monthly basis, the figure rose by 0.2%, significantly less than the + 0.6% expected.

Excluding also the trade component, in addition to that of the prices of food and energy goods, the trend on an annual basis was an increase of 6.6%, slowing down compared to the previous + 6.9%; on a monthly basis, the increase was equal to + 0.2%, at a much lower rate than the + 0.8% in January.

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