Following the CPI preview I published yesterday, I provide this short update in order to assess how the key points that I highlighted evolved in the latest data. In good news, there were several positives to draw from the latest CPI report - read on to find out why!
thank you for your research. It is pretty interesting and very well written. Just to sum things up: if you expect lower inflation, lower interest rates in next 6 -12 months and re-opening of QE and ZIRP, wouldn't it be a good idea to buy longer term govt bonds (10 / 30 years)? What do you think?
Interestingly this alludes to an upcoming post which I intend to write! As with all of my content, it isn't personal investment advice, but in short, and looking at this through the lens of likely future economic outcomes, I personally believe that many long-term government bonds are likely to experience a major decrease in yields in 2023 (and thus higher prices) given 1) lower inflation ahead and 2) a potentially severe recession, the combination of which is likely to result in the eventual re-implementation of QE & ZIRP.
Thank you for your fast reply. I am glad to see we have similar point of view. Of course it isn't investment advice but I really think about adding some longer term US govt bonds to my portfolio... ;-)
Hey Steven,
thank you for your research. It is pretty interesting and very well written. Just to sum things up: if you expect lower inflation, lower interest rates in next 6 -12 months and re-opening of QE and ZIRP, wouldn't it be a good idea to buy longer term govt bonds (10 / 30 years)? What do you think?
Hi James,
Thank you!
Interestingly this alludes to an upcoming post which I intend to write! As with all of my content, it isn't personal investment advice, but in short, and looking at this through the lens of likely future economic outcomes, I personally believe that many long-term government bonds are likely to experience a major decrease in yields in 2023 (and thus higher prices) given 1) lower inflation ahead and 2) a potentially severe recession, the combination of which is likely to result in the eventual re-implementation of QE & ZIRP.
Thank you for your fast reply. I am glad to see we have similar point of view. Of course it isn't investment advice but I really think about adding some longer term US govt bonds to my portfolio... ;-)
I appreciate the way you look at each component that makes up the CPI. Great write-up.
Thank you!