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The yield increased past 5% for the first time since 2007 as indications mount that the conflict in Iran has sparked a fresh wave of inflation, as reported by the Financial Times.
Hours prior to the offering, official figures were published indicating that the US producer price index (PPI) growth increased to 6% year-on-year in April, up from 4.3% in March. This rate of expansion was the quickest since December 2022, propelled by a spike in energy costs resulting from the conflict in the Middle East."Debt financing is increasingly costly," observes Columbia Threadneedle portfolio manager Ed Al-Hussainy.
Inflation is adversely affecting long-term debt responsibilities, and concerns over potential inflation increases have led to a rise in 30-year bond yields by around 0.4 percentage points since the onset of the Iran war.
The PPI index, viewed as a precursor to consumer inflation, hit a three-year peak of 3.8% in April. The typical cost of gasoline in the US has risen more than twice to $4.51 per gallon, and diesel fuel has similarly escalated to about $5.66. Both numbers are near all-time highs.
source: bloomberg.com
Hours prior to the offering, official figures were published indicating that the US producer price index (PPI) growth increased to 6% year-on-year in April, up from 4.3% in March. This rate of expansion was the quickest since December 2022, propelled by a spike in energy costs resulting from the conflict in the Middle East."Debt financing is increasingly costly," observes Columbia Threadneedle portfolio manager Ed Al-Hussainy.
Inflation is adversely affecting long-term debt responsibilities, and concerns over potential inflation increases have led to a rise in 30-year bond yields by around 0.4 percentage points since the onset of the Iran war.
The PPI index, viewed as a precursor to consumer inflation, hit a three-year peak of 3.8% in April. The typical cost of gasoline in the US has risen more than twice to $4.51 per gallon, and diesel fuel has similarly escalated to about $5.66. Both numbers are near all-time highs.
source: bloomberg.com