Are U.S. TIPS markets wrong on inflation?

Another interesting video from on inflation:

George Goncalves, head of US interest rates strategy at Nomura Securities, tells the FT’s Michael Mackenzie that he does not expect to see substantial inflation in the near future. Mr Goncalves says higher commodity prices are a tax on society but not inflationary.

Watch the video

Point to ponder: If you agree with Goncalves that inflation is being overestimated, this week’s 5-year TIPS, which will probably go at a negative base interest rate, is pretty unattractive. It’s still a no-risk investment when held to maturity, but better opportunities might arise within a year.


About Tipswatch

Author of blog, David Enna is a long-time journalist based in Charlotte, N.C. A past winner of two Society of American Business Editors and Writers awards, he has written on real estate and home finance, and was a founding editor of The Charlotte Observer's website.
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