Treasury Inflation Protected Securities are showing very clear divergence on the 2 week scale. Divergence of such are some of the most powerful signals that one can get especially on such a wide timeframe generally mean a shift in dynamics for quiet sometime. More so when concluding in bonds. As bonds generally tied to arrange of macro economic factors and TIPS being tied closely to inflation, CPI and rates. This means that the possibility of inflation remaining at Two percent is very low. As for TIP's to remain bearish
A) Inflation has to be coming down.
B) Rates are going up despite inflation moving higher. (Negatively Affecting Prior Bond Purchased as a Current Yield Would be Worth More so bonds purchased in the index prior to rate increase would be depreciating until rates decrease.)
Currently the economy is already showing signs of a hard landing. Soon the US will have to start to lower rates due to the economic slow down. This coincides with inflation coming down or rate cuts happening as a result of a significant decrease in inflation and to stop deflationary period.
However, this chart suggest that with the economy slowing down that inflation at any moment could still propel itself back up. Especially at the sign of rate cuts. More or less suggesting that it could be a little while yet before Rate Cuts happen because of inflation wanting to remain stagnant.
A) Inflation has to be coming down.
B) Rates are going up despite inflation moving higher. (Negatively Affecting Prior Bond Purchased as a Current Yield Would be Worth More so bonds purchased in the index prior to rate increase would be depreciating until rates decrease.)
Currently the economy is already showing signs of a hard landing. Soon the US will have to start to lower rates due to the economic slow down. This coincides with inflation coming down or rate cuts happening as a result of a significant decrease in inflation and to stop deflationary period.
However, this chart suggest that with the economy slowing down that inflation at any moment could still propel itself back up. Especially at the sign of rate cuts. More or less suggesting that it could be a little while yet before Rate Cuts happen because of inflation wanting to remain stagnant.