United States: debt interest rate soars in the face of accelerating inflation

The interest rate on the United States public debt soars this Wednesday after the publication of the latest inflation figures in the country which showed increased pressure on prices. The yield on the two-year American bond, the most sensitive to monetary policy expectations, soared to 4.90% around 3:45 p.m., compared to 4.79% the day before at the close. The ten-year rate rose to 5.29%, compared to 5.21% on Tuesday.

Inflation in the United States continued to accelerate in September, with a price increase of 3.7% over one year, unsurprisingly still largely driven by energy prices, according to official data published this Wednesday. Over one month, the consumer price index (CPI) showed the same trajectory, with an increase of 0.6%, compared to 0.4% a month earlier, however in line with analysts' expectations, according to the consensus published by MarketWatch.

In August over one year, inflation was measured at 3.4% and over one year, analysts were forecasting an acceleration, but a little less marked than that observed, forecasting inflation at 3.6% on an annual basis. Unsurprisingly, the rise in prices is explained above all by the increase in energy prices, which increased by 5.2% over one month, and even 15.3% in the case of fuel oil, in all cases a sharp acceleration compared to the previous month.

Rising energy prices

Over one year, energy prices have increased by more than 20% and even nearly 75% in the case of fuel oil, due to the war launched by Israel and the United States against Iran and its consequences on energy production and world trade, in particular with the prolonged closure of the Strait of Hormuz, through which 20% of the world's hydrocarbons pass. The consequence is also that the cost of transport is increasing more sharply, by 0.6% over one year, the largest increase since last March, shortly after the start of the conflict.

Food, on the other hand, saw no increase in September, good news for the wallets of American consumers, while the waltz of labels is one of the major themes of the campaign for the mid-term elections, which will be held at the beginning of November.

Other good news for Americans is that health care costs continue to decline, with a decline of 0.7% over one month and a cumulative decline of 3.3% over one year. Under these conditions, so-called core inflation, which excludes food and energy, also accelerated but less markedly, reaching 2.6% over one year, compared to 2.4% a month earlier. Over one month, this underlying inflation increased by 0.3%, an increase similar to that observed in August, but slightly higher than market expectations, which hoped to see it slow slightly.

Undermined by these inflation figures, the New York Stock Exchange opened downward on Wednesday. Around 2 p.m. GMT, the Nasdaq index lost 0.78% and the broader S&P 500 index lost 0.57%. The Dow Jones was moving close to equilibrium (+0.05%).