“US inflation rose to 3.2% in July and this has prompted speculation that the Fed will keep interest rates steady at 5.25% to 5.5% (the highest it has been for 22 years). 

The relationship between rising inflation and interest rates is cyclical. Higher interest rates can lead to reduced borrowing and spending by both individuals and businesses. This decrease in spending can, in turn, help counteract inflationary pressures, helping to stabilize prices over time.

As you can see from our data below, the rise in the one year SOFR swap rate corresponds to the recent increase in one year inflation swap price.” Ian Sams, Head of Product, EMEA

At TraditionData we offer extensive coverage across US inflation swaps and, in conjunction with Tradition’s USD Swaps broking business, we offer the market leading USD interest rate derivatives data.

US 1Y CPI vs 1Y SOFR Graph