Breitbart Business Digest: Bond Market Complacency May Get Run Over by Rate Hike Train

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The former Federal Reserve Bank of St. Louis president sounded the alarm about inflation and interest rates on Friday during a seminar on the sidelines of the annual meetings of thetaking place in Marrakech, Morocco. Markets have become too complacent when it comes to inflation, with investors almost entirely discounting the idea that the U.S. central bank may have to raise rates further.

If you really think the Fed is done with rate hikes, there’s a good deal of logic to this. As SMBC chief economistthe average length of time between the last hike and the first ease has been eight months The three-month annualized increase in the sticky-price CPI measure calculated by the Atlanta Fed has been on the rise for two months, hitting 4.4 percent in August.Core sticky-prices—which exclude food and energy—are up 4.5 percent on a three-month annualized basis and 5.5 percent on a one-month annualized basis. In other words, sticky-prices are saying thatAlthough Bullard is no longer on the Fed, his views should not be discounted.

 

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