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Rates Spark: The evaporation of real yields
Headline US producer price inflation has hit 6%, and headline US consumer price inflation is approaching 4%. Both of these readings are for April. By the May readings, they'll be higher still. The US economy will become a base "4% inflation economy." While the expectation is for inflation to rise into the summer, but then to ease through the fall, we still have to acknowledge the importance of current printed inflation rates. It's the latest delivered inflation. No ifs or buts or forecasts, it's simply there. The level of rates needs to be confronted against the elevated inflation rates that we have right now. The ... (full story)