The Correlation Between Hormuz Strait Reopening and the Inflation Breakeven

As of today’s close:

Figure 1: Odds of Strait of Hormuz reopening by July 1, % (black, left scale); five year Treasury-TIPS spread, % (red, right scale), and DKW estimated five year expected inflation rate, % (pink, right scale). Source: Kalshi, Treasury via FRED, Federal Reserve Board, and author’s calculations.

Leave a Reply

Your email address will not be published. Required fields are marked *