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> The shift looks to be driven mostly by a rise in investors’ expectations for future inflation. In the United States, prices of inflation-protected bonds imply
by tanderson92 8y ago
> The shift looks to be driven mostly by a rise in investors’ expectations for future inflation. In the United States, prices of inflation-protected bonds imply that investors currently expect consumer prices to rise 2.09 percent annually over the next five years, up from 1.65 percent expected in September.
This claim that the shift is due to inflation expectations is inconsistent with the data. Most of the rate increases has been due to real interest rate increases, unless I am missing something which I don't think I am.
source: https://fred.stlouisfed.org/series/T5YIE https://fred.stlouisfed.org/series/T5YIE, https://fred.stlouisfed.org/series/DGS5 https://fred.stlouisfed.org/series/DGS5
- deleted 8y ago[deleted]
- pishpash 8y agoIt has been both, about half and half.
- tanderson92 8y agoRight, so I don't understand the confidence with which the reporter is mentioning only one and implicitly attributing the rise exclusively to it. Even if you use 50% of the effect as being due to one or the other as the threshold, it's actually been more due to real interest rate increases (only 55-60% so you're right it's like half and half), so the piece is just really baffling.