US inflation: Stubborn US inflation – two-year bond yield rises to its highest level in over two years

New York, Düsseldorf. The latest US inflation data is putting pressure on the monetary authorities led by Fed Chairman Kevin Warsh to raise interest rates exceptionally sharply at the next meeting in December. That triggered a sell-off in the bond market. The yield on two-year securities rose to up to 4.76 percent, the highest level in more than two years. If prices on the bond market fall, the return increases in reverse.

Data from the US Department of Labor showed on Tuesday that consumer prices (CPI) rose 0.4 percent compared to September. Experts had expected 0.3 percent. The core inflation rate – excluding the volatile items energy and food – remains constant at 0.3 percent. Here too, expectations (0.2) were missed.

In view of the price pressure, the Fed's management committee is now discussing the question of whether a regular interest rate increase of 0.25 percentage points is even sufficient. Fed Governor Christopher Waller said before the data was released that a 50 basis point interest rate hike in December “needs to be considered.” “An increase of just 25 basis points would jeopardize our credibility and I don't want to take that risk,” he told a conference in London on Tuesday.