Rising Treasury yields and increasing inflation expectations are shaping the current economic landscape, with the New York Fed's survey indicating a rise in one-year inflation expectations to 3% from 2.97%. This shift is prompting investors to demand higher returns, contributing to the modest rise in yields. Meanwhile, a decline in household income and a growing percentage of consumers struggling to meet debt payments could dampen consumer spending, potentially impacting economic growth. The mixed performance in the stock market reflects these dynamics, with the S&P 500 recovering some losses, while the Nasdaq faces pressure from higher rates.
In the commodities market, oil prices have surged to their highest level in five months, reinforcing inflation expectations as energy costs remain a key component of inflation indices. This rally in oil prices comes amid a stable dollar, which suggests balanced currency expectations despite the inflationary pressures. As of 16:11 on January 13, the price of crude oil (CL1) stands at $78.68, up from its last close of $76.57, with an intraday high of $79.27.