US inflation data steady, but markets brace for impact of Trump’s upcoming financial appointments
The US consumer price index (CPI) rose at a 2.6 percent rate, according to the latest inflation data released on Wednesday, reports BNN Bloomberg.
However, the bond market reaction was limited. Investors have shifted their attention to the upcoming Donald Trump presidency.
In an interview with BNN Bloomberg, Ed Devlin, founder of Devlin Cpital, former portfolio manager at PIMCO, and a senior fellow at the C.D. Howe Institute, commented on the bond market’s response to the inflation report.
Devlin explained that the CPI numbers, which showed a headline rate of 2.6 percent and a core rate of 3.3 percent, were in line with expectations, resulting in a relatively muted market reaction.
“The bond market was bracing for the worst and when it hit on the screws you had a relief rally there,” he said, noting that the bond market’s focus is on the long term.
“Inflation is not the primary concern,” Devlin remarked, adding, “The real focus is on the new Trump administration.”
As Trump has announced some cabinet positions, several key roles in the financial sector, including treasury secretary, commerce secretary, and those handling trade, remain vacant.
Devlin pointed out that any unexpected choices for these positions could lead to a significant market response.
Canadian businesses are monitoring the situation with concern over potential tariffs.
Devlin acknowledged the anxiety surrounding this issue but suggested that the tariff threats may serve primarily as a negotiating tactic.
Reflecting on the uncertainty, Devlin stated, “Will his second term be different from first? We all just have to wait and see.”
