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UPDATE 1-U.S. TIPS breakeven rates fall after Sept CPI data
October 18, 2016 / 12:56 PM / a year ago

UPDATE 1-U.S. TIPS breakeven rates fall after Sept CPI data

(Updates market action after U.S. CPI data)

NEW YORK, Oct 18 (Reuters) - The U.S. bond market’s gauges of investors’ inflation expectations fell on Tuesday as data showed a moderation in the underlying inflation trend, raising concerns it would take longer to reach the Federal Reserve’s 2 percent inflation goal.

The yield difference between regular 10-year Treasury notes and 10-year Treasury Inflation Protected Securities was last at 1.69 percent, little changed from late on Monday, according to Tradeweb.

Earlier the 10-year TIPS breakeven rate hit 1.70 percent, which was its highest level since late April.

The U.S. Labor Department said the Consumer Price Index, its broadest inflation gauge, rose 0.3 percent in September, matching the median forecast among analysts polled by Reuters.

However the CPI core rate, which excludes volatile food and energy prices, edged up 0.1 percent in September, falling short of an expected 0.2 percent increase.

TIPS breakeven rates have climbed from their recent lows in June on higher oil prices and some encouraging data signaling improved U.S. growth in the second half of 2016. (Reporting by Richard Leong; Editing by Meredith Mazzilli)

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