5 & 10-Year Inflation Expectations are at Parity

US inflation expectations have declined significantly over the past six weeks. 30-year breakeven inflation is now just 1.59% after hitting a high of 1.86% on 4/29/16. 10-year breakeven inflation has moved from 1.71% to 1.47% and 5-year breakeven inflation has gone from 1.61% to 1.47%. In addition to the overall lowering of inflation expectations, 5-year and 10-year breakeven inflation expectations are now equal for the first time since July 2008. This is in contrast to an average spread of 36 bps from 2008-2015. Lastly, the 5-year, 5-year forward breakeven inflation rate ( Ben Bernanke’s favorite inflation indicator when he was chairman of the Fed) has fallen to just 1.44%. It is just above the lows of 1.41% hit in February but otherwise its at the lowest level since 2009.

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Charlie Munger: Invert And Use “Disconfirming Evidence”

Charlie MungerCharlie Munger is considered to be one of the best investors and thinkers alive today. His thoughts and statements on investment research, investment psychology, and general rational behavior are often incredibly insightful. Anyone can learn something from this billionaire investor and philosopher. Q2 2020 hedge fund letters, conferences and more If you’re looking for value Read More

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