one further item about the coming tug of war between - long bond...

one further item about the coming tug of war between
- long bond yields trying to rise to reflect improving growth which by itself would cause usd gold to drop (real yields would be rising) vs
- rising inflation vs
- US FOMC being between a rock and a hard place because higher bond yields costs US more debt servicing costs

https://www.markiteconomics.com/Public/Release/PressReleases
22 Jan 2021 US Composite PMI
Meanwhile, inflationary pressures intensified as supplier delays and shortages pushed input prices higher. The rate of input cost inflation was the fastest on record (since October 2009), as soaring transportation and PPE costs were also noted.A number of firms were able to partially pass-on greater cost burdens, however, as the pace of charge inflation quickened to a steep rate. The impact was less marked in the service sector as firms sought to boost sales, but manufacturers registered the sharpest rise in selling prices since July 2008


https://www.knowledgeleaderscapital.com/2021/01/22/get-ready-for-services-prices-to-accelerate-higher/

Get Ready for Services Prices to Accelerate Higher

January 22, 2021

By Bryce Coward, CFA in Economy, Markets

We’re going to keep this post short and sweet because the charts speak for themselves. Today, preliminary Markit PMIs were released for January. Headline numbers ticked up, which is great and shows a continued expansion into the new year. The release also showed that input prices for services exploded higher again, to another all-time high by a wide margin. However, those input prices have not yet fully fed through to prices charged for services. Given the tight relationship between input prices and prices charged, we would expect prices charged to accelerate higher over the coming months. This makes since since service providers will naturally seek to protect their margins.

Moreover, core personal consumption expenditure prices, which is the Fed’s preferred inflation indicator, also appears set to move considerably higher in order to catch up to input prices. This has obvious implications for Fed policy.