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Ben Bernanke pandered to the political wind yesterday. Shocker.

What might also shock some life into the ‘I love Janet Yellen’ because she’s perma-dovish crowd is this thing we Real-Time Risk Managers call marked-to-market prices. We acknowledge that there are better functions on Bloomberg’s terminal to calculate what is embedded in TIPs (expectations), but the actual price chart of TIP, on its own price merits, is decisively bullish.

While we are aware that inflation expectations dampened on sequentially decelerating February inflation reports, we have seen nothing but the opposite occur (hence the V-Bottom in this chart) ever since. Today, of course, is April and with the insulation of an expectation for a continued European sovereign debt collapse, we see nothing in the immediate term that changes our view of Inflation’s V-Bottom (if you’d like a copy of our Q2 Macro Themes slides that outlines how a sovereign debt default cycle will lead to sustained inflation, please email us at ).

We remain long of TIP in the Virtual Portfolio and outline the intermediate term TREND line of support for TIP below at $103.96.

KM

Keith R. McCullough
Chief Executive Officer

He Who Sees No V's - TIP