Moves in bond yields, implied inflation breakeven rates, and inflation-adjusted 'real' yields suggest investors anticipate the Fed's 'higher for longer' interest rate policy will help lower inflation to around 2.5%.
But this is not a re-pricing of the Fed's near-term trajectory, rather a repricing of the longer term economic and inflation outlook.
This suggests the Fed is entering a phase of structurally higher rates than perhaps policymakers themselves, and certainly investors, had anticipated.
Many analysts are skeptical that moves in bond yields can be broken down, quantified and compartmentalized with any great degree of accuracy.
TIPS are a key market-based barometer of investors' inflation expectations, but they have their flaws.
Persons:
Austan Goolsbee, Goldman Sachs, Marvin Barth, Barth, Torsten Slok, Jamie McGeever, Christina Fincher
Organizations:
Chicago Fed, CNBC, Securities, Apollo Global Management, Reuters, Thomson
Locations:
ORLANDO, Florida