Monthly Archives: June 2016

A Rate Hike And Falling Inflation Expectations?

The Federal Reserve is considering another rate hike, perhaps as early as this month, but the Treasury market’s estimate of future inflation signals skepticism from the vantage of government bond traders. The implied forecast, based on the yield spread between nominal and inflation-indexed Treasury yields, is inching lower again. The recent decline suggests that the odds for squeezing monetary policy at the central bank’s June 14-15 FOMC meeting may be lower than hawkish Fed comments of late imply.
Continue reading