Daily Archives: Aug 6, 2020 at 07:38 am EDT

Pondering Negative Real Yields And Higher Inflation Forecasts

These are strange days for the US government bond market. Inflation-indexed Treasuries are pricing in higher inflation expectations as real (inflation-adjusted) yields tumble. In “normal” times the consensus view would probably advise that one of these trends is misguided. But in the new world order of the coronavirus crisis it’s timely to ask: Could both of these market-implied conditions be accurate or at least reasonable?
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Macro Briefing | 6 August 2020

Still no sign of a deal between GOP and Dems on coronavirus relief: TH
Bank of England leaves rates unchanged, warns of slow recovery: CNBC
German manufacturing orders surged in June: MW
World food prices continued to rise in July: Reuters
World economy expands in July, first time since January: IHS Markit
US ISM Services PMI: sector growth picked up in July: MW
US Services PMI: sector’s business activity stabilizes but demand fades: IHS Markit
US private payrolls rise by only 167,000 in July–far below expectations: CNBC