Pondering Negative Real Yields And Higher Inflation Forecasts
capitalspectator.substack.com
These are strange days for the US government bond market. Inflation-indexed Treasuries are pricing in higher inflation expectations as real (inflation-adjusted) yields tumble. In “normal” times the consensus view would probably advise that one of these trends is misguided. But in the new world order of the coronavirus crisis it’s timely to ask: Could both of these market-implied forecasts be accurate or at least reasonable?
Pondering Negative Real Yields And Higher Inflation Forecasts
Pondering Negative Real Yields And Higher…
Pondering Negative Real Yields And Higher Inflation Forecasts
These are strange days for the US government bond market. Inflation-indexed Treasuries are pricing in higher inflation expectations as real (inflation-adjusted) yields tumble. In “normal” times the consensus view would probably advise that one of these trends is misguided. But in the new world order of the coronavirus crisis it’s timely to ask: Could both of these market-implied forecasts be accurate or at least reasonable?