An interesting analysis of bonds and a look at inflation
expectations and how accurate those expectations are amid slowing economic growth. At the end of his analysis, the author states,
“Given this construct of slower future economic
growth and inflation expectations, a weakening unemployment picture could
accelerate us further in that direction. While we have reached our
initial aforementioned target on both the breakeven rate and 10-Year Treasury
which could lead to a short-term bounce, further declines appear to be in the
cards for the remainder of 2010.
Not an optimistic look at what the
future in 2010 will bring – but one that’s worth reading about and considering.
