The surprise in inflation data reported last week is driving interest rates higher.

Market interest rates have moved much higher due to the data released last week. It is the inflation pressure driving these rates up. The Consumer Price Index increased by 0.1% for the month with energy prices declining 5.0% while food prices rose 0.8%. On a year-over-year basis, energy prices are up 23.8% and food prices are up 11.4%. It was the increase in the core rate excluding the volatile food and energy sectors that was the surprise. The core rate increased by 0.6% or double expectations. This was a reversal of lower results in June and July. On a year-over-year basis, the core rate is up 6.3% while the headline number is +8.3% through August.

 

PROBANK AUSTIN ADVISOR - SEPTEMBER 19, 2022