Intermezzo: TIPS 10y Annual Inflation Expectations Top 6%

While perusing data this afternoon, we created this fun little chart:

Tips

There certainly isn’t much of an edge in the TIPS market if you want to bet on inflation.  Either CPI is headed north of 6%, or TIPS buyers are going to lose money.

I’d certainly think about betting on the convergence trade here.  I doubt we will see a single 6% print in the next 10 years.

In general, the inflation expectancy trade has been quite crowded for the past 6-12 months.  At this point, even a small credible USD-positive statement will likely send dollars flying higher.  There just haven’t been any.

 

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One Response to Intermezzo: TIPS 10y Annual Inflation Expectations Top 6%

  1. David Schawel says:

    Well said

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