Inflation rising fast after second-quarter collapse

The consumer price index rose 0.6% last month for the second straight time, with gasoline accounting for a quarter of the gain. Core CPI, which strips out food and energy prices, jumped by 0.6%, marking the biggest gain since January 1991.

Why it matters: The back-to-back CPI increases combined with Tuesday's bounce back producer price index reading, suggest inflation is far from dead.

• Inflation worries also were stoked by Friday's jobs report, which showed stronger-than-expected gains last month.

Where it stands: Benchmark U.S. 10-year Treasury yields settled at 0.67% Wednesday, the highest since July 6, as the market has seen a notable reversal.

• Last week 10-year yields stalled near record lows below 0.6%.
• Yields have now risen in four consecutive sessions.

What they're saying: "Inflation initially collapsed in [the second quarter] as the pandemic hit, but it has recovered quickly in recent months as central banks engaged in unprecedented easing," Bank of America commodity and derivatives strategist Francisco Blanch said in a note to clients.

• "In turn, the aggressive expansion of monetary and fiscal policy in the US has led to fears of US currency debasement and overshooting inflation."

What it means: Blanch recommends commodities, currencies like the Mexican peso and Brazilian real and Treasury Inflation-Protected Securities, which "are closely correlated to inflation."