Treasuries fell a second straight day as wholesale prices rose at almost double the pace forecast and New York manufacturing unexpectedly grew, fanning concern that inflation will quicken. Demand increased for inflation-linked Treasuries after the reports as investors sought protection from the risk that six Federal Reserve interest-rate cuts since September will fuel economic growth. Crude oil set a record high today. The price report is a wake-up call that's there is still inflation pressure.
Crude oil climbed above $113 a barrel, the highest since futures began trading in 1983, on supply disruptions in Nigeria and Mexico.
Inflation expectations increased a fourth straight day, Treasury yields indicate. Given what inflation is doing, it makes it more difficult for the Fed'' to lower rates or increase cash in the banking system.
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