Inflation expectations

[oldfart]

For what its worth, I calculate the Treasury--TIPS spread every month or two to get the market expectation of inflation.

Data: Recent Note, Bond, and TIPS Auction Results

The results are:

5-year 1.537%
10-year 2.236%
30-year 2.232%

Enjoy.

 

[Rshermr]

For what its worth, I calculate the Treasury--TIPS spread every month or two to get the market expectation of inflation.

Data: Recent Note, Bond, and TIPS Auction Results

The results are:

5-year 1.537%
10-year 2.236%
30-year 2.232%

Enjoy.

Which, of course, would indicate that at this time there is NO need to get all wrapped up in concerns about inflation. What we have to worry about is how to get the ue rate lower, and hiring for better jobs.

 

[AmazonTania]

Um, here are the Bid-to-Cover ratios from the latest auction issuing these securities.

Treasury 5-Year: 2.42
Treasury 10-Year: 2.41
Treasury 30-Year: 2.06

TIPS 5-Year: 2.16
TIPS 10-Year: 2.4
TIPS 30-Year: 2.4

While there all above 2, which indicates aggressive bids, these are the lowest demand the Government has probably seen for Treasuries since probably 2009. Especially for the 10 year. Also, two weeks ago China and Hong Kong became net sellers of US Treasuries. This doesn't sound like instilled confidence that your Government can control it's inflation. These two metrics show that the market may very well have high inflation expectations.