ZTS - Markets Tumble VIX Up 8% On Hot Inflation Data Dollar Yields Jump As Traders Unwind Rate Cut Bets: What's Driving Markets Tuesday? | Benzinga
Wall Street witnessed one of the worst sessions since the beginning of the year, with widespread declines across the board as stocks were hit by the impact of a higher-than-expected inflation report.
The Consumer Price Index (CPI) rose at a 3.1% annual rate in January, down from December’s 3.4% but surpassing expectations of 2.9%. Core inflation, which excludes energy and food prices, unexpectedly remained steady at 3.9%, failing to meet the anticipated decline to 3.7%. Monthly fluctuations also exceeded expectations, causing ripples in interest rate forecasts.
Traders swiftly adjusted their positions, lowering their expectations for rate cuts in 2024. March is now completely off the table, with the likelihood of the first cut by June at 76%, and almost fully priced by July. The anticipated number of rate cuts for 2024 has been reduced to four, down from nearly six just a couple of weeks ago.
Treasury yields surged across the board, with the 2-year yield rising by 15 basis points to 4.60%, and the 10-year yield by 10 basis points to ...