Forecast of the U.S. 10-Year TIPS Yield

The Relationship Between Core and Trimmed PCE Inflation Rates and the 10-Year TIPS YieldWhen the 10-Year yield minus the core PCE inflation rate reaches its most negative point and reverses, this forecasts a low and recovery in the TIPS yield (see Chart I). Or, when the Federal Reserve changes policy…

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The Profit Structure of Banking Improves Dramatically

The decline in the TIPS 10-year yield to -1.0% reduced the 10-year nominal yield to 1.35%. The delay in the expected increase in the TIPS to 0.4% and nominal to 2.0% reduces the 1-year forecast for appreciation potential for large banks to 57% from the initial estimate of 68%, based…

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