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Inflation vs. 10-year Treasury Yields
I recently received March inflation data from the US Bureau of Labor Statistics. This was 8.56% year-on-year (slightly above the 8.4% consensus) red heat. The financial markets continued to be put up for sale as they seemed to be directly responding to rising inflation and negative real yields, with the 10-year rate rising from 1.5% at the beginning of the year to more than 2.7%.
Rising inflation and a decade of financial yields combine to create what we consider to be the most important macroeconomic charts today. Inflation is well above bond yields, and the period of monetary restraint continues as it causes guaranteed losses to investors who depend on these risk-free rates.
Even if the CPI peaks this month or in the coming months, inflation is expected to rise well above the inflation target of 2% and well above the 10-year treasury yield between 2022 and 2023. increase.
The consumer price index is well above the 2% inflation target and above the 10-year Treasury yield.
On a monthly basis, the total consumer price index has reached its highest acceleration since 2005. The core CPI, which removes energy and food and is more closely monitored by the Federal Reserve and the market, is showing a monthly slowdown and showing some inflation. Components may be upside down. The bond market showed a slight recovery as the core CPI was 0.32% month-on-month, below the consensus of 0.5%.
Ultimately, treatments for higher prices are higher prices. Ultimately, sustained inflation can overwhelm consumers and their wallets, and the effects of deflation can be much greater.
Year-on-year and monthly rate of change in CPI
Year-over-year and monthly rate of change in CPI without calculating food and energy
Practical information
Although this is not a research product that provides a clear trading signal, it frequently presents data-driven prospects throughout the time frame. Over the next few quarters, the likelihood of a recession in the United States and other parts of the world appears to be even higher.
The following description is not investment advice
The world is in desperate need of neutral, non-political and programmatic funding. The negative real yield environment facing the economic system today is an unavoidable reality in the late stages of the long-term debt cycle. Financial restraint (negative real yield) is a method of eroding (trying) the real value of debt at the expense of creditors (bond holders).
This is one of the biggest reasons for our lasting super bullish against Bitcoin. The sum of addressable markets for things like Bitcoin (node decentralization, immutability, hardcapped supply, complete concept, and Bitcoin is the only viable option for proof of work mining) , Over $ 100 trillion ($ 100 million).
Bitcoin issuance is programmed to lower inflation
