Inflation in the US is at a four-decade high. Here is what you need to know today.
Pressure on the Fed to raise interest rates even more aggressively is growing after the U.S. inflation rose by the most since 1981 The consumer price index increased 8.5% in March from a year earlier, with gasoline costs driving half of the monthly increase. The reading represents what many economists expect to be the peak of the current inflationary period, capturing the impact of soaring food and energy prices after Russia invaded Ukraine. Consumer prices in India increased by 6.95% last month. As oil jumped back above $100 a barrel, concerns mounted inflationary pressures will stay elevated and hamper economic growth.
A New York City shooter remains at large after an incident at a subway station during the morning rush hour injured 16 people, including 10 with gunshot wounds. Five people are in critical condition, and a motive isn't known. The incident isn't being investigated as terrorism but the police department has identified a person of interest.
The peace talks with Ukraine were at a dead end as the U.S. monitors claimed his forces may have deployed a poisonous substance in Mariupol. It will be difficult to verify a chemical attack. The incident was being investigated, but the deputy defense minister said that a preliminary assumption was that gruesome weapons not classified as chemical may have been responsible.
The CEO of one of Singapore's highest-profile startups has been suspended as the company's accounting practices are being investigated. Sources say that Ankiti Bose's company was trying to raise $150 million to $200 million when investors raised questions about its finances. The talks could have increased the company's valuation to more than $1 billion. Bose believes her suspension was due to her complaints about harassment.
The US SEC is looking into lucrative SPAC trades after seeing their gains as high as 800%. The investigators became suspicious of the spike in warrant trading, which gives holders the right to buy shares at a specified price in the future. Almost 300 mergers have been announced since late last year, and one out of every four of them have had such jumps before. The SEC is trying to figure out if they were illegally based on inside information.
The last line of defense for the purists has been reached as the bond market looks like a regime change. Benchmark Treasury yields have climbed to test their four-decade downtrend using a logarithmic scale. They pulled back to close lower after hitting 2.83%, based on my calculations. The whisper target for many investors is 3%.
If you are an investor in Treasuries, you do not care what the purists think. You are more concerned with managing the worst losses this year. The total return gauge of the securities is set to plunge by almost 8%, the worst decline since 1974. The 20-year note yielded 3% for the first time in three years on Monday. Some long-lost buyers have been tempted out of the woodwork by that. According to a survey, investors still see 10-year Treasuries finishing the year at 2.70%, suggesting we have reached dip-buying levels.
Cormac is a deputy managing editor in the Markets team.
With assistance from Cormac Mullen.
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