Stagflation Fears Are Excessive If Break-Even Curve is Right
- Infrastructure spend will help boost growth, 4D’s Shaw says
- Goldman says markets are pricing in oil shock as temporary
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Calls that stagflation is returning are premature, according to rates markets.
Traders are still anticipating price pressures to peak only moderately higher in coming years and subside over the longer term, based on five- and 10-year break-even rates. Market players also question how long the strongest consumer price index gains in around 40 years will last, pointing to some key differences between the current situation and the oil supply shock in the 1970s.