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Is Inflation Rearing Its Ugly Head? USD Inflation Swap Forward 5Y5Y Surges

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.

The US has not seen inflation in excess of 2% since September 2008 (with the exception of Q1 2012). One measure of inflation is core Personal Consumption Expenditures growth YoY which stands now at 1.7%.

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But EXPECTED inflation has been spiking over the past several days. So at long last, after trillions in Fed stimulus and zero interest rates (well, NEAR zero), we are starting to see expected inflation.

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The surge in inflation expectations partially explains the rise in US Treasury yields.

Now that Trump is President, Fed Chair Janet Yellen is expected to serve out her 1st term, but not be asked to serve a second term. I would dearly love it if Thomas Hoenig, currently at the FDIC, was put forth as Federal Reserve Chairman. But there is always the chance that an outsider will become the next Fed Chair (G William Miller under President Carter comes to mind).

Like Jean Ralphio.

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And then they could rename The Federal Reserve building on Constitution Avenue as …

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