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📊 Inflation: Hot Like Your Valentines ❤️

📊 Inflation: Hot Like Your Valentines ❤️

Ticker Tea
February 14, 2024

Inflation data came in HOT 🔥 yesterday, leading to a sell off across markets.

The 10yr treasury increased 15 basis points (+0.15%) to 4.316% while the 30yr fixed-rate mortgage increased 17 basis points to 7.13%.

Wall Street was expecting 2.9% YoY CPI and was disappointed with yesterday’s print at 3.1%, which solidified the “higher for longer” sentiment. The market is now pricing in a 9% chance of a rate cut in March, while just one month ago there was a 77% probability. There is a 41% chance of a cut by April.

The regional banking index ($KRE) sold off 4.23% as market participants priced in the likelihood of more banking stress, especially those with outsized commercial real estate and long term securities portfolios

The rapid rise in interest rates over the past ~24 months has resulted in a significant decline in valuation of such portfolios.

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▪️ Inflation y/y change by category:

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