Are U.S. TIPS markets wrong on inflation?

Another interesting video from FT.com 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.

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