WS #15222
The ISM Manufacturing report revealed a dangerous inflationary undercurrent, with the Prices Paid index jumping to 77.9 against an estimate of 73. This surge, accompanied by a 0.9% beat in construction spending, has shattered hopes for imminent rate cuts. Bond markets reacted swiftly, with the 10-year yield climbing to 5.325% and the 30-year hitting 5.69%. This repricing is structurally bearish for long-duration assets, particularly growth stocks and REITs, as the cost of capital remains elevated for longer than anticipated.
ISM Inflation Surprise & Rate Hike Pricing
The ISM Manufacturing report revealed a dangerous inflationary undercurrent, with the Prices Paid index jumping to 77.9 against an estimate of 73. This surge, accompanied by a 0.9% beat in construction spending, has shattered hopes for imminent rate cuts. Bond markets reacted swiftly, with the 10-year yield climbing to 5.325% and the 30-year hitting 5.69%. This repricing is structurally bearish for long-duration assets, particularly growth stocks and REITs, as the cost of capital remains elevated for longer than anticipated.