Diversifying your assets and investment will make sure you are prepared for any situation. It’s important that you review your options and make informed decisions in a proactive manner.
Analysis: Rising U.S. bond market inflation gauge masks extent of pandemic shock By Gertrude Chavez-Dreyfuss
FILE PHOTO: A picture illustration shows U.S. 100 dollar bank notes
NEW YORK (Reuters) – A surge in the bond market’s best gauge of how much inflation investors expect in the years ahead could be underestimating how long the economic shock from the pandemic will last, even if the new Joe Biden administration pushes its proposed massive stimulus package through Congress quickly.
Investors have piled into U.S. 10-year Treasury Inflation Protected Securities (TIPS), driven by expectations of an economic recovery, continued fiscal support from Congress and steady monetary accommodation from the Federal Reserve. That has pushed TIPS yields lower and lifted the implied inflation rate at which an investor would break even buying either an inflation-adjusted 10-year note or normal 10-year Treasury debt.
The Globe and Mail Gertrude Chavez-Dreyfuss Bookmark Please log in to listen to this story. Also available in French and Mandarin. Log In Create Free Account
Getting audio file . This translation has been automatically generated and has not been verified for accuracy. Full Disclaimer
A surge in the bond market’s best gauge of how much inflation investors expect in the years ahead could be underestimating how long the economic shock from the pandemic will last, even if the new Joe Biden administration pushes its proposed massive stimulus package through Congress quickly.
Investors have piled into U.S. 10-year Treasury Inflation Protected Securities (TIPS), driven by expectations of an economic recovery, continued fiscal support from Congress and steady monetary accommodation from the Federal Reserve. That has pushed TIPS yields lower and lifted the implied inflation rate at which an investor would break even buying either an inflation-adjusted 10-year note or normal 1
Blog
Blog
Blog
PODCAST
13 Jan, 2021 Author Brian ScheidPolo Rocha
The short-term outlook for the U.S. economy may be dark, but bond investors see a bright future.
The U.S. Treasury yield curve has steepened to levels not seen since 2016, signaling that investors expect economic expansion and higher inflation in the coming years as coronavirus vaccines are distributed and incoming President Joe Biden and a Democrat-controlled Congress are expected to pass another substantial stimulus package.
The steepening curve is likely a sign of economic recovery, said Michael Crook, deputy chief investment officer at Mill Creek Capital. It s very possible we re on track for a period of above-trend economic growth unlike anything we ve seen in the last two decades, but it won t happen all at once.