The Great Inflation Fantasy! Unfortunately, No Inflation In Sight … Until 2023

by confoundedinterest17

Policy makers agreed at the meeting to hold rates near zero until the labor market reached maximum employment, and inflation reached 2% — and was on track to moderately exceed that goal for some time. Forecasts also released on Sept. 16 showed officials didn’t expect the economy to reach those targets until 2023 or 2024, as it gradually recovers from the steep recession inflicted by the coronavirus pandemic.

The problem is the Treasury Inflation Protected Securities (TIPS) are pricing in little inflation. A negative TIPS yield means your return will be less than the change in consumer prices.

The US Treasury Inflation Indexed curve is negative across the entire curve.

According to The Fed’s minutes posted today, inflation (as measured by Core PCE growth) is not expected to hit 2% until 2023.

Where is the inflation that The Fed is trying to achieve? No where in sight .. until 2023.