Treasury yields have seen a modest rise, driven by an unexpected increase in one-year inflation expectations, which climbed to 3% from the previous month's 2.97%, according to the New York Fed's survey of consumer expectations. This uptick in inflation expectations suggests that investors are demanding higher returns to offset the anticipated decrease in purchasing power. Additionally, the survey highlighted a decline in household income and a growing percentage of consumers, now at 14.16%, who expect to struggle with minimum debt payments in the coming months. These factors could potentially dampen consumer spending and economic growth.
The broader market displayed mixed reactions, with the S&P 500 recovering some earlier losses, the Dow gaining, and the Nasdaq declining, reflecting sector-specific responses to the economic landscape. The oil market's rally to a five-month high further supports inflationary pressures, while the dollar remained stable, indicating balanced currency expectations. As earnings season progresses, financial sector reports are anticipated, with major banks like JPMorgan Chase & Co. and Wells Fargo & Co. in focus.
As of 16:11 on January 13, the 10-year Treasury yield stands at 4.80, slightly up from its last close of 4.78. This movement aligns with the broader economic indicators and market dynamics, including rising inflation expectations and mixed stock performances.