Here is an interesting take on inflation from Sober Look: http://soberlook.com/2016/02/the-fed-could-be-back-in-play-in-2016.html
Here is their conclusion based on the idea that inflation expectations (or lack of) may be overdone:
“Some suggest that raising rates in the current environment is nothing short of insanity. Given the monetary easing by the ECB, the BOJ, etc. (as rates move deeper into negative territory) or the dovish stance by the BOC, the BOE, and others, the US dollar is bound to resume its rally, causing further damage to the US economy. In fact the latest PMI measures, (from Markit as well as ISM) suggest that the US economic activity has already slowed sharply in the first quarter. Nevertheless, given the Fed’s focus on some of the indicators discussed above, rate hikes in 2016 are now back on the table.”
Perhaps the longer end of the Treasury market is picking up on this too (from barchart.com):
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