15% Nominal GDP With a 1.5% Benchmark Treasury Yield!?

by Michael Pento
Pento Portfolio Strategies LLC

The Producer Price Index for the month of May was up 6.6% year over year. This was the greatest yearly increase since the Bureau of Labor Statistics began tracking the data. In addition, the Headline Consumer Price Index rose 5% year over year in May, which is the fastest pace since August 2008. Import Prices also surged in May, soaring by 11.3% in the past twelve months—the greatest surge in a decade. However, those blistering rates of inflation didn’t rattle the bond market much at all. In fact, the bond market is completey unfazed by the current inflation data.

Below is a chart of the Benchmark Treasury yield intra-day on June 10th, the day of the hottest CPI print in 13 years. And it wasn’t a sell-the-news even either, because interest rates had been falling into the release of the strongest inflation print in over a decade.

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