By Persistent inflation has torpedoed bond markets, with the latest CPI print triggering a $1.2 trillion wipeout in Treasury values. The damage was worst in:
• Long-dated bonds: 30-year yields up 45bps
• TIPS: Breakevens hit 2.83%, highest since 2023
• Munis: AAA 10-year yields crossed 4% threshold
“The last mile of inflation is proving hardest,” noted PIMCO’s Marc Seidner,
Highlighting:
✓ Shelter costs up 6.1% annually
✓ Services inflation running at 5.4%
✓ Wage growth still elevated at 4.8%
Market implications:
→ Fed funds futures now show 58% chance of no 2025 cuts
→ 2-year yield approaches 5% psychological barrier
→ Real yields turn positive across the curve