Policymakers at the U.S. Federal Reserve are in danger of failing to see the real path of inflation rates and stoking market volatility in the process, according to new research by multinational investment firm Pimco.
According a company blogpost, the central bank hasn’t fully understood the real reasons behind a recent collapse on the breakeven inflation rate — an important metric used to gauge longer-term trends in consumer price growth. This breakeven rate is the difference between the yield on a fixed-rate bond and an inflation-linked bond such as a Treasury inflation-protected security (TIPS).
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.