What I Learned This Week

Is inflation coming? Are you ready?

In WILTW November 2, 2017, we began building the case that inflationary momentum was building in many countries across the globe—and that was before the nearly 25%-surge in crude oil prices. Consider the following: The TIP-to-IEF ratio, a key bond-market measure of inflation expectations, has provided valuable information since early-2016 when it bottomed with many other reflation indicators. This indicator has broken-out to a new multi-year high. And, several broad commodity benchmarks have also broken out to new multi-year highs. The previous 2008-2015 downtrends in these measures traded closely with the global deflationary-forces. The breakouts in this ratio and commodities indica…

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