Five year inflation breakevens have risen tightly with oil prices, while accounting for inflation and liquidity premia implies a more gradual albeit more steady increase in implied expected inflation.
Category Archives: financial markets
“Prosperity: Crises, Debt & the Future of American Economic Policy”
That’s the name of the economic session at the La Follette Forum on American Power, Prosperity and Democracy. A video of this panel is available through Youtube. Here are some recounting and thoughts on the panel discussion.
“The New Fama Puzzle”
or “Do you really know what Uncovered Interest Parity is, and whether it holds?” Published as of today in IMF Economic Review, with coauthored with Laurent Ferrara (SKEMA Business School), Matthieu Bussière (Banque de France), and Jonas Heipertz (Columbia Business School):
Oil Prices, Price Surprises, and Forwards, Breakevens, and Term Spreads
First, what are current one month and 1 month forward 2 months doing?
Has the Ten Year Treasury Yield Equaled the Average of Ex Post Future Short Rates Plus a Risk Premium?
And similarly for the Two Year Treasury?
What to Make of the 10yr-2yr and 10yr-3mo Spreads
As is well known, the recession talk has surged in the wake of the (short-lived) inversion in the 10yr-2yr spread.
More Recession Talk
Articles regarding the signals emanating yield curve appear in Reuters, CNBC, FoxBusiness, Bloomberg, CNN . Here’s a relevant picture:
Recession, Inflation – What’s the Market View?
The economy is still likely to grow, according to at least the 10yr-3mo spread. Less definitive indicator from the 10yr-2yr. Expected inflation rates have stopped moving up, and so too have implied future rates 2-3 months ahead; in fact they’ve both fallen in recent days. (For what analysis, rather than markets, think about inflation, see Jim’s Monday post; on recession, see Jim’s Wednesday post.
The Ruble: Convertible No Longer
From Anders Aslund at Project Syndicate:
And on March 8, the central bank decided to stop exchanging rubles for foreign currencies, which means that the ruble is no longer convertible.