Demand for protection against rising costs is showing up in the S&P Global Developed Sovereign Inflation-Linked Bond Index, with the yield tumbling to -0.65%, the lowest level since April 2013. The index has returned 1.09% MTD and 2.70% YTD, as of March 31, 2015.
Janet Yellen has been quoted saying “oil is having a transitory negative effect on inflation,” and she is taking “comfort” in the longer-term inflation expectations. Reading between the lines, once oil normalizes, a higher inflation level (headed toward the Fed’s inflation target) is to be expected.
Source: S&P Dow Jones Indices LLC. Data as of March 31, 2015. Charts and tables are provided for illustrative purposes only. Past performance is no guarantee of future results.The posts on this blog are opinions, not advice. Please read our Disclaimers.