The More Yellen Talks Up Inflation, the Less Traders Believe
Sept 28, 2015 15:10:51 GMT 7
rgs2001uk likes this
Post by Fletchsmile on Sept 28, 2015 15:10:51 GMT 7
Think you have to take what she says with a pillar of salt anyway.
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The More Yellen Talks Up Inflation, the Less Traders Believe Her
The bond market isn’t buying what Federal Reserve Chair Janet Yellen is selling on inflation.
While she reiterated last week that the Fed expects inflation to gradually rise back near 2 percent, long- and short-term market forecasts for price gains have plunged to their lowest levels since 2009. That’s even though oil prices have rebounded almost 20 percent since late last month.
“We’ve had so many years of accommodative policy, I think the market is losing faith in the Fed,” said Priya Misra, the head of global interest-rate strategy in New York at TD Securities, one of the 22 primary dealers that trade with the central bank. “You’re not really seeing the impact of policy end up in inflation.”
Falling energy prices have contributed to keeping inflation low, a trend that should be transitory, according to Yellen. But she cited another force behind cooling inflation -- the stronger dollar, which depresses import prices, as shown in a chart accompanying her speech.
contd.
www.bloomberg.com/news/articles/2015-09-27/the-more-yellen-talks-up-inflation-the-less-traders-believe-her
+++++++++++++++++++++++++++++++++++++++++
The More Yellen Talks Up Inflation, the Less Traders Believe Her
The bond market isn’t buying what Federal Reserve Chair Janet Yellen is selling on inflation.
While she reiterated last week that the Fed expects inflation to gradually rise back near 2 percent, long- and short-term market forecasts for price gains have plunged to their lowest levels since 2009. That’s even though oil prices have rebounded almost 20 percent since late last month.
“We’ve had so many years of accommodative policy, I think the market is losing faith in the Fed,” said Priya Misra, the head of global interest-rate strategy in New York at TD Securities, one of the 22 primary dealers that trade with the central bank. “You’re not really seeing the impact of policy end up in inflation.”
Falling energy prices have contributed to keeping inflation low, a trend that should be transitory, according to Yellen. But she cited another force behind cooling inflation -- the stronger dollar, which depresses import prices, as shown in a chart accompanying her speech.
contd.
www.bloomberg.com/news/articles/2015-09-27/the-more-yellen-talks-up-inflation-the-less-traders-believe-her
