2023-03-17 Markets
Implied inflationary expectations fell last week, as evidenced by the performance differential between nominal bonds [+2.7%] and inflation linkers [+0.8%]. This brought to mind a sentence attributed to the chief economist at JPM (I’m going by memory): ‘When the Fed hits the breaks, someone is bound to hit the windshield; you just don’t know who.’ And indeed the windshield is getting more cluttered by the day.
Meanwhile equities continued their underperformance, while bonds in general supported portfolio values.
Regarding the ECB raising rates, despite the possible pain, it’s good to see for once politically appointed officials sticking to their declared objectives.
Cover graph: an example of how an inflation indexed bond has performed relative to its target.
[Cover: Lavoce.info]
Meanwhile equities continued their underperformance, while bonds in general supported portfolio values.
Regarding the ECB raising rates, despite the possible pain, it’s good to see for once politically appointed officials sticking to their declared objectives.
Cover graph: an example of how an inflation indexed bond has performed relative to its target.
[Cover: Lavoce.info]
