Tag Archives: inflation expectations

The U.S. inflation-linked bond (TIPS) market is in an interesting position right now. Inflation protection seems cheap, but the question always remains: is it cheap for a reason? Unfortunately, I am not able to answer that question, I am going to just briefly outline the debate…. Bond Economics  Brief TIPS Market CommentBrian Romanchuk

Not a good indicator of the business cycle, but it is a pretty fair indicator that inflation expectations are not rising. Zero HedgeRecession Red Flag Rears Its Ugly Head - Treasury Yield Curve Crashes To Post-Crisis Flats Tyler Durden

For us the five major drivers of government bond yields are: Inflation expectations and inflation: The by far most important criterion. High inflation expectations must be compensated via higher bond yields. The main driver behind inflation expectations is the wage development, this is the form of inflation that typically persists. Price inflation follows inflation expectations with a certain lag. Wealth: The higher the wealth of a country, the lower the bond yields. Wealth is typically...