Wednesday, December 12, 2012

Bernanke Critics Can’t Fight Bonds Showing No Inflation

As Ben S. Bernanke considers whether to worry about inflation before adding to his record monetary stimulus today, he has the bond market on his side.

Debt traders are anticipating prices will accelerate at the Federal Reserve’s target rate of about 2 percent during the next five years.

 The break-even rate for five-year Treasury Inflation Protected Securities -- a yield differential between the inflation-linked debt and Treasuries -- was 2.07 percentage points on Dec. 11.

 That’s a measure of the outlook for consumer prices over the life of the securities.

Source: via Bob on Pinterest