Posted inChart of the Day

The tiger the central banks have by the tail isn’t inflation – it’s deficits

The “taper tantrum” of 2013 ubiquitously mentioned as a precedent for today’s market was prompted by soaring inflation. As the first chart makes clear, inflation expectations embedded in Treasury bond yields went vertical as the Fed brought real interest rates down. Nothing like that has happened this year: the real yield (as measured by the […]