It seems that Bernanke's plan to help the recession through sparking inflation is already showing signs of success. A hint to this is found through assessing the bond purchases over the last month or so by investors. Investors are paying eight times more than in April for options on interest-rate swaps that protect against rising yields relative to those that bet on them falling; this is an indicator since bonds that compensate for higher consumer prices also show heightened inflation expectations.
It will be interesting to see whether inflation expectations reach the consumer market and spark people to increase their purchases over the next couple months in an attempt to avoid losing value on their money.
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