Hot Inflation Sends the Dollar to a New 52-Week High as Fed Hike Bets Climb

THE LEAD

Tuesday's inflation report came in hot, and the market did the math fast. October consumer prices rose 0.4%, a tenth more than economists expected. Core prices, which leave out food and energy, rose 0.3% against a 0.2% forecast. That's a third straight month of firm underlying inflation.

Rates moved first. The two-year Treasury yield jumped 17 basis points to 4.73%, and the 10-year climbed to 4.98%. By the evening, Goldman Sachs had penciled in another Fed rate hike for March. Two Fed officials also floated the idea of moving faster ahead of the December meeting.

The dollar followed the rates. UUP closed at $29.15, a new 52-week closing high and two cents above the $29.13 it hit on Oct. 12 and again last Friday. Everything priced in dollars paid for it. Gold fell 2.7%, silver 3.4%, platinum 2.1% and copper 1.8%.

Jim Rogers would read a day like Tuesday by asking one question: did anything change in the ground? Nothing did. No new mine opened. No new well came in. What changed was the price of money. That's the dollar's game, and this fall the dollar keeps winning it.

This morning the tape is trying to shrug it off. Nasdaq 100 futures are up 1.9% as AI stocks bounce. Silver futures are up 3%, and palladium is up more than 5%. The bond market is closed for Veterans Day, so rates get a day off before Thursday's jobless claims and Friday's wholesale prices.

Richard Dennis taught the Turtles to act on closes, not on hope. A strong open is a quote. The close is the record. Which of Tuesday's moves actually changed a trend, and which ones didn't, is in the Scoreboard below.