US Inflation Expectations Have Rolled Over by Eric Bush, Gavekal Capital
Given the decline in commodities, perhaps it shouldn’t be too surprising to see breakeven inflation rates rolling over once again. 5-year TIPS implied breakeven inflation currently sits at 149 basis points, 23 basis points off the year-to-date high made in May. 10-year TIPS implied breakeven inflation is at 182 basis points, 12 basis points off the year-to-date high also made in May. Also, 30-year breakeven inflation is down 9 basis points from the high made in May.
What does value investing really mean? Q1 2021 hedge fund letters, conferences and more Some investors might argue value investing means buying stocks trading at a discount to net asset value or book value. This is the sort of value investing Benjamin Graham pioneered in the early 1920s and 1930s. Other investors might argue value Read More
Some good news is that the five-year, five-year forward breakeven inflation rate, the preferred inflation rate when Ben Bernanke was the head of the Fed, is currently at the high end of the range it has been in 2015. It has trended between 1.95%-2.20% and currently is at 2.16%. However, as the chart below shows this is still on the low end of the range going back to 2003.