The 10-year, 10-year Treasury forward, a futures contract that shows what investors think the 10-year Treasury yield will be in a decade’s time, has declined to 1.6% this year, according to Financial Times.
In other words, bond traders do not see inflation rising beyond the Federal Reserve’s 2% inflation target in the next 10-years. The Fed has mostly missed the inflation target over the last eight years.
As such, markets expect Fed’s chair Powell to signal tolerance for above-target inflation during his speech at the Jackson Hole Symposium on Wednesday.
Reprinted from fxstreet, the copyrights all reserved by the original author.
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