US business activity at more than five-year high; inflation pressures building

Live updates

1. 1h ago

   US Business Activity Hits Five-Year High Amid Inflation Concerns

   US business activity is expanding at its fastest pace since 2021, with the September flash S&P composite PMI rising to 58.4. While the economy shows strong growth, the surge is fueling inflation worries and triggering a selloff in bonds. This economic strength has pushed US long-dated Treasury yields to their highest levels in over 20 years, specifically with the 30-year yield reaching its highest point since 2004. Market reactions include a drop in spot gold to $4,280 per ounce and significant volatility in leveraged derivatives.

   Why it matters

   Strong business growth typically signals economic health but can lead to higher interest rates if it triggers inflation. The current bond selloff reflects investor expectations that borrowing costs will remain elevated to cool the economy. This creates a tension between high growth indicators and rising financial costs for borrowers.

   What is confirmed

   • US business activity is expanding at the fastest pace since 2021.
   • The flash S&P composite PMI for September improved to 58.4.
   • Spot gold prices fell to $4,280 per ounce.
   • US long-dated Treasury yields reached their highest levels in more than 20 years.
   • The US 30-year yield is at its highest level since 2004.

   Still unconfirmed

   • Interest rates may be heading much higher.
   • Oxford Economics' US business-cycle indicator has fallen into the recession zone.
   • Traders slashed $1.7 billion in leverage during a Treasury shock.

   What to watch next

   • Official September PMI final reports
   • Federal Reserve decisions on interest rate adjustments
   • Changes in US long-dated Treasury yield trends
   Sources used for this update (14)

   1. Reuters — US business activity at more than five-year high; inflation pressures building
   2. KITCO — Spot gold drops to $4,280/oz as flash S&P composite PMI improves to 58.4 in September
   3. Bloomberg.com — US Business Activity Expands at the Fastest Pace Since 2021
   4. Seeking Alpha — Interest Rates May Be Heading Much Higher
   5. pro.thestreet.com — Flash PMI Signals Strong Economy, But Raises Inflation Worries
   6. WSJ — One Catalyst for Today's Bond Selloff: U.S. Business Activity Growth
   7. MarketWatch — Businesses are growing at the fastest pace in over four years. Why war and inflation aren’t stopping the U.S. economy.
   8. techcabal.com — TechCabal Daily – Egypt’s biggest data grab
   9. ca.finance.yahoo.com — Global bond selloff rolls on, US 30-year yield at highest since 2004
   10. cryptoslate.com — Bitcoin survives a 5.2% Treasury shock as traders slash $1.7 billion in leverage
   11. investinglive.com — Recession signal flashes on Oxford Economics' US indicator, but spending shows no sign of cracking
   12. finance.yahoo.com — Is Ashland (ASH) Quietly Building Its Next Growth Engine?
   confidence 90%