Daily Archives: Dec 10, 2020 at 07:44 am EST

Treasury Market Expects Higher Inflation. Will Hard Data Follow?

The implied inflation forecast via Treasury yield spreads continues to creep higher, but today’s November report on consumer prices is expected to reaffirm that pricing pressure remains muted. With the US suffering another coronavirus wave, the odds remain low that inflation will accelerate sharply in the near term. But a vaccine rollout is close and the economy will likely strengthen in 2021. Combine that with the incoming Biden administration, which will be incentivized to juice animal spirits, and the groundwork appears to be set for firmer prices generally.
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Macro Briefing: 10 December 2020

* Pfizer vaccine faces one last hurdle before US rollout
* House votes to fund government for a week as shutdown looms
* Covid-19 relief legislation force Facebook to sell Instagram and WhatsApp
* Covid-19 surge strikes South Korea and Japan
* Fitch raises growth outlook for China to 8% for 2021
* UK economy slowed to a crawl in October
* NY state’s pension fund will divest from fossil fuels
* Gold will suffer because of rising demand for bitcoin, JP Morgan predicts
* US job openings beat expectations with a modest increase in October