Daily Archives: Dec 20, 2018 at 07:42 am EST

Treasury Inflation Forecasts Continue Falling After Fed Rate Hike

The Federal Reserve’s decision to raise interest rates yesterday emboldened the Treasury market to reprice inflation expectations to the downside. The softer outlook on pricing pressure follows several months of lower inflation forecasts, based on the yield spreads on nominally priced government bonds less their inflation-indexed counterparts. If recent history is a guide, the crowd looks set to cut inflation estimates further in the weeks ahead and thereby raise questions about the wisdom of monetary policy.
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Macro Briefing: 20 December 2018

Trump administration says US troops are being withdrawn from Syria: BBC
Trump’s withdrawal from Syria ignores advice from advisers: Reuters
UK and Europe preparing for no-deal Brexit in March: CNBC
US population grew at slowest pace in over 80 years: NY Times
Fed raises rates despites signs of softer US growth: CNN
US and foreign stock markets fall sharply after Fed rate hike: Bloomberg
Foreign policy experts: cyber attack on US is a high risk for 2019: CFR
Fed trims 2019 US GDP growth forecast to median +2.3%: Federal Reserve
Current account deficit for US widened in Q3, representing 2.4% of GDP: MW
US existing home sales in Nov post biggest annual decline in over 7 years: WSJ
China’s gov’t aid to Latin America dwarfs US support: GZeroMedia