WS #16910
US CPI came in at 3.7%, missing the 3.6% consensus and hitting a four-month high, while the SF Fed warned that El Niño weather patterns pose a 'meaningful risk' of higher inflation in 2027. This combination is forcing a repricing of rate expectations, dampening the post-election equity rally and providing a tailwind for Treasuries as investors brace for a 'higher for longer' rate environment.
US Inflation and Rates
US CPI came in at 3.7%, missing the 3.6% consensus and hitting a four-month high, while the SF Fed warned that El Niño weather patterns pose a 'meaningful risk' of higher inflation in 2027. This combination is forcing a repricing of rate expectations, dampening the post-election equity rally and providing a tailwind for Treasuries as investors brace for a 'higher for longer' rate environment.