Bruce Kasman is joined by Jay Barry and Joe Lupton to discuss the recent rise in G-10 bond yields and inflation compensation measures. While the rise in inflation breakevens in the US and Europe is consistent with the reflation tilt built into our medium-term forecast, it also displays a whiff of stagflation as rising near-term inflation expectations are not accompanied by rising real yields. Our baseline forecast of growth resiliency anticipates nominal yields to move up further from here as real yields rise. Breakevens are expected to stabilize as inflation comes off the boil. While they would likely face downside pressure if growth materially disappointed, a key upside risk is the potential for a dovish Fed shift if Chair Powell is not reappointed. 

Speakers:

Bruce Kasman

Jay Barry

Joseph Lupton

This podcast was recorded on October 13, 2021.

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