FYI: The bond market may be about to get confirmation of its rebounding inflation wagers, according to Vanguard Group Inc. strategist Anne Mathias.
The $5.6 trillion asset manager is among proponents of the view that market-based measures of inflation expectations will extend their climb from a three-year low. Potential progress in U.S.-China trade negotiations has been a key contributor, along with the Federal Reserve’s signaling on Oct. 30 that it would need to see a significant pickup in inflation before lifting rates.
Five-year breakeven rates -- a proxy for anticipated annual increases in consumer prices into 2024 -- touched a four-month high of 1.64% last week, with nominal yields surging as well. Developments on the trade front aside, bond traders’ bearish shift may now hinge on inflation data to be released this week.
Regards,
Ted
https://www.fa-mag.com/news/vanguard-braces-for-test-of-bond-market-s-budding-inflation-bet-52671.html?print
