Medium term inflation expectations are muted, growth expectations are recovering slightly, and perceived risk seems contained.
Category Archives: financial markets
The Debt Ceiling As Kabuki
From Marketplace yesterday, “The debt ceiling explained” (Dylan Miettinen):
August CPI – Nowcasts
The CPI release for August numbers is tomorrow. As of today, here are the Cleveland Fed nowcasts for CPI and Core CPI:
Messages from the (Bond) Market
Today, the CEA published a blogpost on how the administration’s infrastructure and Build Back Better plans won’t be inflationary. I think it’s of interest to see how the market (which will undoubtedly turn out to be wrong) thinks inflation and output will evolve.
Forecaster Views on the Overheating Hypothesis
Earlier in the year, one fear was that excessive fiscal stimulus would push up inflation, push up long term yields. Professional forecasters don’t seem to view that outcome as imminent.
Market Inflation Expectations and Real Rates
Is the inflation scare bubble over?
As of yesterday, the five year inflation breakeven was 2.5%, down from 2.72% in mid-May. The estimated inflation risk and liquidity premia adjusted 5 year breakeven was 1.62% as of 7/30 (when the corresponding actual breakeven was 2.56%).
Forecasted Ten Year Interest Rate Trajectory Declines
From WSJ surveys:
Public Service Announcement: Real Rates Are (Still) Low
If demand is so high, why are real rates so low (even admitting Fed QE, forward guidance, etc.)?
How Much of US Federal Debt Is Held by Foreign/International Investors
As a share of debt held by the public (i.e., excluding intragovernmental holdings).
Real Borrowing Costs for the US Treasury: May 2021
As of May 2021, the nominal 10 year Treasury rate is 1.6%. The real rate is -0.9%.