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2021-11-13

Bond sell off continues as 10-year break-even rate reaches 2.76%

Break-evens are the difference between the yield on Treasury inflation protected securities — or the so-called real yield — and the yield on a similarly maturing Treasury note.

Because interest payments on Tips are adjusted for inflation, the break-even rate signals how traders and investors predict inflation will move in the future. 

FT 12 November 2021

https://www.ft.com/content/59d0b03a-f716-4c7a-9bf5-b5c87082cbdd


U.S. consumer sentiment hits pandemic low as inflation expectations hit 13-year high

https://www.marketwatch.com/story/u-s-consumer-sentiment-hits-pandemic-low-as-inflation-expectations-hit-13-year-high-11636730249



Yields on inflation-protected bonds maturing over the next couple of years are strongly negative, implying that investors expect rapid price rises in the near term. 

But longer-term market expectations of inflation have remained stable.

Krugman NYT 11 November 2021


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