What I Learned This Week

Is inflation coming? Are you ready?

The TIP-to-IEF ratio, a key bond-market measure of inflation expectations, has provided valuable information for the inflation trends since the early-2016 deflation extreme. This measure registered a bull-market new-high in April and is up 9.42% from the January 2016 bottom. Since the 2016 bottom, the TIP-to-IEF ratio has traded closely with many other inflation markets and indicators. The previous 2008-2015 downtrends in these measures traded closely with the global deflation trends. The major broad commodity indices (BCOM, CRB, GNX) registered bull-market new-highs in May and their relative-strength (R/S) measure versus the MSCI World Index is trading above the rising 200-day moving-av…

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