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📊 Inflation Watch: Will higher energy prices slow the disinflation trend?

This week's US CPI release could become one of the most important macro events of the month.

After April inflation came in at 4.0% year-on-year, markets are now watching closely to see whether higher energy prices and recent geopolitical developments are beginning to feed back into broader price pressures.

The longer-term trend remains encouraging. Both consumer and producer inflation have fallen significantly from their 2022 peaks, reflecting the impact of tighter monetary policy and easing supply-chain pressures.

However, the latest charts also show that progress has become less linear. Monthly inflation readings have started to firm again, while producer prices have been trending higher in recent months.

For investors, the key question is no longer whether inflation is falling, but how quickly it can return toward the Fed's target.

A stronger-than-expected CPI print could reinforce the "higher-for-longer" interest-rate narrative and support Treasury yields and the US dollar.
A softer reading, on the other hand, would strengthen expectations that inflation continues to move gradually in the right direction.

All eyes now turn to Wednesday's CPI release.

📊 Chart of the Week: Higher Yields, Higher Stocks - What's Changed?

The S&P 500 continues to push toward new highs even as Treasury yields remain elevated and the yield curve stays positively sloped.

Not long ago, rising yields would have been seen as a warning sign for equities.

Strong corporate earnings, resilient economic data, and continued enthusiasm around AI have helped investors look through higher borrowing costs and delayed expectations for Fed rate cuts.

The positive 10Y–2Y spread suggests the bond market is no longer flashing the recession signals that dominated previous years. Instead, investors seem increasingly comfortable with a "higher-for-longer" interest rate environment.

The result? Stocks are focusing on growth, while bonds remain focused on inflation.

The key question:

Can equities continue making new highs if bond yields remain elevated, or will higher rates eventually become a stronger headwind for risk assets?

📊 Chart of the Week: Higher oil, higher yields - Is the Inflation trade back?

Oil prices have been rising again, and US bond yields are moving higher at the same time.

This matters because higher oil prices can keep inflation pressure alive. When inflation risks rise, markets start to question whether the Fed can cut rates as soon or as much as previously expected.

The chart shows this clearly: as Brent oil climbed, US 10-year and 30-year yields also moved higher.

For investors, the message is simple:

Higher energy prices are not just a commodity story. They can quickly become an inflation, interest rate, and equity market story.

The key question now:

If oil stays high, will markets need to rethink the path for inflation and interest rates?

Eid Mubarak from EquityRT! 🌙

Wishing all our clients celebrating a day filled with peace, joy, and meaningful moments with family and friends.

As we celebrate this blessed day, and reflect on sacrifice, gratitude, and unity, may it bring prosperity, success, and new opportunities to you and your loved ones.

📊 Chart of the Week: The yield curve is no longer pricing fast Fed cuts

The US 10Y-2Y yield spread remained positively sloped last week as Treasury yields continued to climb across the curve, with both 10-year and 2-year yields reaching their highest levels in months.

The recent move reflects a market increasingly adjusting to a “higher-for-longer” macro environment:

▪️inflation pressures remain persistent,
▪️oil prices have rebounded sharply,
▪️and resilient economic data continues to delay expectations for aggressive Fed easing.

Unlike previous years, the yield curve is no longer deeply inverted. Instead, bond markets appear increasingly focused on structurally higher long-term rates, elevated term premiums, and the possibility that inflation may remain more persistent than expected.

The key question now:

Are markets beginning to accept that the post-pandemic era of ultra-low yields may be over?

📊 Chart of the Week: Brent vs CPI: Is Inflation Risk Returning?

Inflation had been gradually cooling following the Fed’s aggressive tightening cycle, while oil prices remained relatively contained through most of 2024 and early 2025.

However, the recent rebound in Brent crude, driven by renewed geopolitical tensions and supply concerns, is beginning to reintroduce upside inflation risks just as markets were becoming more comfortable with the disinflation narrative.

The key question now:

Will higher energy prices slow the path toward lower inflation again?

This Mother’s Day, we celebrate the women who lead with strength, bring clarity to every challenge, and fill every space they touch with care and compassion.

To the mothers, mentors, leaders, and changemakers shaping homes, workplaces, and communities - thank you for the impact you make every single day. 💐

Happy Mother’s Day from all of us at EquityRT.

📊 Chart of the Week: U.S. Labor Market Pulse

The chart highlights a gradual shift in labor market dynamics over recent months.
Job growth is becoming less consistent, wage increases are easing, and unemployment has moved slightly higher.

This suggests the labor market is no longer as tight as before, but still healthy overall.

For markets, this supports the idea of a gradual slowdown rather than a sharp downturn. At the same time, it means expectations for interest rate cuts are likely to depend on how upcoming data evolves.

Will April’s data confirm the soft landing… or challenge it?

When Oil and Stocks Rise Together… What Does It Mean?

Rising oil prices are typically seen as a headwind for equities. But when both oil and stock markets move higher at the same time, the message becomes more complex.
Markets are not pricing in a demand shock, but rather a combination of resilient growth and supply-driven pressures. In this environment, equities remain supported by earnings strength and improving sentiment, while oil reflects ongoing geopolitical risks and tighter supply conditions.

Over the past two weeks, Brent crude rebounded from $90 to above $100, while the S&P 500 climbed from around 6,800 to new highs above 7,100.

At what point do higher energy prices begin to challenge growth and can equities continue to look through it?

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