Excerpt from CNBC quoting DataTrek co-founder Nick Colas:
…. “As we scan the landscape of market commentary going into 2021, ‘the return of inflation, perhaps with a vengeance’ is a very, very common theme,” Nick Colas, co-founder of DataTrek Research, said in a note this week.
Colas pointed out that 5- and 10-year break-even rates, or the difference between government bond yields and Treasury Inflation-Protected Securities, are both just a shade below 2%. That represents two-year highs and is a measure of where the market sees the consumer price index headed.
Such an environment, Colas pointed out, is not generally a good one for inflation-sensitive securities such as longer-dated bonds “unless one believes the market’s enthusiasm for a 2021 global economic recovery is deeply misplaced”….
Read the full article here on CNBC!