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Why is the bond market shrugging off a six-year high in inflation?

Sunny Oh
Why is the bond market shrugging off a six-year high in inflation?

Price pressures can ravage the value of long-dated debt, the corner of the bond market most sensitive to inflation. Rather, current yields at the long end reflect investors’ expectations for consumer prices to turn lower by the end of the year, maintaining a downward trend well into 2019. Standish Mellon’s economists forecast CPI to rise 2.4% for 2018 but cool to 2.3% in 2019.