My takeaway from Powell’s speech this week is that the economy is still resilient and that we might need higher rates for longer. I’m not sure that’s proceeding carefully — but it’s probably the only viable option at the moment.
I agree we are likely not be done with interest rate hike - maybe 1 more and then higher for longer. The problem is the higher for longer and the rising term premium which means bond yield can continue to rise a bit more. Thanks for your comments!
Great post as always, Marianne. I think TIPS are becoming more and more interesting, with their recent selloff. Roughly speaking, if inflation is less than 2.36% per year on average over the next ten years, then it will turn out to have been better to buy a 10-year nominal note at 4.9% and hold it to maturity. On the other hand, if inflation is more than 2.36% per year on average over the next ten years, then TIPS will have been the better bet.
Thank you for the Chai share!
You are most welcome - I love Chai and thanks for your detailed recipe :-) !!
My takeaway from Powell’s speech this week is that the economy is still resilient and that we might need higher rates for longer. I’m not sure that’s proceeding carefully — but it’s probably the only viable option at the moment.
I agree we are likely not be done with interest rate hike - maybe 1 more and then higher for longer. The problem is the higher for longer and the rising term premium which means bond yield can continue to rise a bit more. Thanks for your comments!
Great post as always, Marianne. I think TIPS are becoming more and more interesting, with their recent selloff. Roughly speaking, if inflation is less than 2.36% per year on average over the next ten years, then it will turn out to have been better to buy a 10-year nominal note at 4.9% and hold it to maturity. On the other hand, if inflation is more than 2.36% per year on average over the next ten years, then TIPS will have been the better bet.