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The rate environment extended its hold. Treasury yields remained near multiyear highs as investors processed August's consumer price index, which confirmed that inflation is still sticky.
The question the data leaves open is how long this condition persists, and assets priced on future expectations remain the most exposed. Elevated yields do their damage through the discount rate.
At multiyear highs, the rate at which future cash flows are discounted rises, shrinking the present value of any asset that depends on a future payoff rather than a current one.
Capital that can earn a real return today has less reason to reach for speculative positions. The August CPI print reinforced that calculus.
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