I'm seeing a lot of "inflation is coming" in the US media recently. Are they wrong? Just wondering what people think and how this may affect inflation in Canada.
Bond-Market Inflation Outlook Picks Up After Trump Victory
Bond-Market Inflation Outlook
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Re: Bond-Market Inflation Outlook
There are also quite a few pundits who fear a major hangover after this Trump party:
https://www.bloomberg.com/news/articles ... -of-growth
Lack of productivity growth, aging populations, excessive debt . . .
https://www.bloomberg.com/news/articles ... -of-growth
Lack of productivity growth, aging populations, excessive debt . . .
Re: Bond-Market Inflation Outlook
Bank of Canada shows long term (32 years to maturity) nominal bonds yielding 2.25% and long term (28 years to maturity) real bonds yielding 0.43%. The spread of 1.82% covers both anticipated inflation and a premium for insurance against unanticipated inflation. The size of that insurance premium is not known with any precision, but usual estimates range from 0.5% to 0.8%. Subtracting, expectations for anticipated inflation range between 1.0% and 1.3%.Flaccidsteele wrote:I'm seeing a lot of "inflation is coming" in the US media recently. Are they wrong? Just wondering what people think and how this may affect inflation in Canada.
Remember, that's an average over the next three decades. (I think that's much too low, but what do I know.)
George
The juice is worth the squeeze
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Re: Bond-Market Inflation Outlook
Yeah I read this as well but the same issues (i.e. lack of productivity, aging populations, excessive debt) existed before Trump so basically nothing has changed.JaydoubleU wrote:There are also quite a few pundits who fear a major hangover after this Trump party:
https://www.bloomberg.com/news/articles ... -of-growth
Lack of productivity growth, aging populations, excessive debt . . .
"Trump rally" is temporary anyway. Like all rallies.
Very interesting. Thanks for this.ghariton wrote:Bank of Canada shows long term (32 years to maturity) nominal bonds yielding 2.25% and long term (28 years to maturity) real bonds yielding 0.43%. The spread of 1.82% covers both anticipated inflation and a premium for insurance against unanticipated inflation. The size of that insurance premium is not known with any precision, but usual estimates range from 0.5% to 0.8%. Subtracting, expectations for anticipated inflation range between 1.0% and 1.3%.
Remember, that's an average over the next three decades. (I think that's much too low, but what do I know.)
George
I agree that the expectations for anticipated inflation seems low. Not sure why I'm reading more "inflation is coming" articles when nothing has really changed.
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Re: Bond-Market Inflation Outlook
Fear? The odds of a rate hike this month have risen to 100%. Trump is expected to cut taxes and various regulations to stimulate the economy. Those measures might be inflationary, but he also talks about tampering with trade deals, TPP and NAFTA. Upsetting global trade or starting protectionist policies could have disastrous consequences. Right now, a soaring US dollar may be deflationary for the US, as its exports become too expensive and imports become cheaper. Still, all this seems very speculative.I agree that the expectations for anticipated inflation seems low. Not sure why I'm reading more "inflation is coming" articles when nothing has really changed.
The global economy is still very weak. Nothing has changed. Yet.
Re: Bond-Market Inflation Outlook
Interesting article by Michael Batnick regarding bonds...
http://theirrelevantinvestor.com/2016/1 ... he-reaper/
http://theirrelevantinvestor.com/2016/1 ... he-reaper/
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Re: Bond-Market Inflation Outlook
Is inflation dead yet? It feels like it’s dying...
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Re: Bond-Market Inflation Outlook
CRB Commodity Index has now taken out 2016 lows and heading straight down, so we won't see it anytime soon.
https://www.bloomberg.com/quote/CRY:IND
Too much cheap money sloshin’ around the world. First mistake we ever made was letting Nixon get off the gold standard – Lou Mannheim, Wall Street