Bond Market Braces For July CPI Data: A Test Of Fed's Control Over Inflation
Portfolio Pulse from Piero Cingari
The bond market's anticipation of long-term U.S. inflation is nearing its highest level in over a year, suggesting that the Federal Reserve might grapple with high inflation rates for an extended period. The 5-year/5-year forward inflation breakeven rate, a long-term inflation predictor, indicates a trend towards 2.5%. This contradicts the belief that the Fed's aggressive interest rate hikes will contain the biggest increase in consumer prices since the 1980s. Forecasts for this week’s consumer price index report project a 3.3% annual growth in July.
August 09, 2023 | 9:08 pm
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POSITIVE IMPACT
The anticipation of long-term U.S. inflation nearing its highest level in over a year might impact the performance of Horizon Kinetics Inflation Beneficiaries ETF (INFL) as it is designed to provide exposure to companies that are expected to benefit from inflation.
Horizon Kinetics Inflation Beneficiaries ETF (INFL) is designed to provide exposure to companies that are expected to benefit from inflation. The anticipation of long-term U.S. inflation nearing its highest level in over a year might impact the performance of the ETF positively as it could lead to an increase in the value of its holdings.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 70
NEGATIVE IMPACT
The anticipation of long-term U.S. inflation nearing its highest level in over a year might impact the performance of BlackRock, Inc. (BL) as it operates in the bond market.
BlackRock, Inc. (BL) operates in the bond market. The anticipation of long-term U.S. inflation nearing its highest level in over a year might impact the performance of the company as it could lead to a decrease in the value of bonds.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 50