Karl Schamotta, chief market strategist at Corpay, noted that the acceleration in US core consumer price growth last month strengthened expectations for a rate hike at the Federal Reserve's September meeting and added momentum to the dollar's upward trend. As market participants further increased their bets on a rate hike at next week's Fed meeting, US Treasury yields crept higher, led by the short-to-medium maturities most sensitive to monetary policy, and the dollar rose against major currencies. In his view, the balance of risks facing the Fed now tilts toward raising rates. With core price growth showing signs of accelerating, crude oil benchmark prices up 78 percent so far this year, tariffs raised again, the US government rolling out fiscal support measures, and artificial intelligence investment still ongoing, there is little to suggest that inflationary pressures will settle in the coming months, leaving officials with few options other than to act now.
Accelerating core CPI and rising rate-hike bets push Treasury yields higher, led by short-to-medium maturities.
