Weekly Economic Update: October 18th, 2021
• Yields increased over the week as the two-year Treasury note climbed by eight basis points to 0.40% while the five-year note increased by twelve basis points to 1.13%.
• Equity markets finished the week higher shrugging off another round of hot inflation readings as the CPI posted a 0.4% increase in September while the core CPI increased by 0.2%.
• Supply constraints continue to keep price levels elevated as bottlenecked ports, trucking and general labor shortages as well as shuttered factories overseas drive the mismatch between supply and demand.
• Consumers have been unfazed as retail sales posted a solid 0.7% increase in September, all the while inflation expectations remain anchored with the University of Michigan’s sentiment survey showing 5-10 year inflation expectations falling from 3.0% to 2.8%