Inflation Dichotomy and Equities vs. Real Estate

View in your browser Inflation Dichotomy and Equities vs. Real Estate By Erik Norland, Senior Economist CME Group Surging Inflation Unique to U.S. U.S. core inflation at 4.5%, U.K. at below 2.5%, eurozone 1%. China’s inflation below pre-pandemic level at 1%, Japan at around zero. Massive U.S. fiscal spending led to a surge in consumer … Read More

Inflation Lacks Persistent Driver and Bonds Expect Unique Fed Move

View in your browser Inflation Lacks Persistent Driver and Bonds Price Unique Fed Move By Blu Putnam, Chief Economist Erik Norland, Senior Economist CME Group Weak Dollar Drove Inflation in the 1970s Inflation has exceeded Fed’s 2% target, yet bond yields barely moved. Ten-year Treasuries are yielding less than 1.3%, below actual inflation rate. Weaker U.S. … Read More

Dividend Futures as an Inflation Hedge?

View in your browser Dividend Futures as an Inflation Hedge? By Blu Putnam, Chief Economist, CME Group Dividends Futures and Soaring Inflation Dividend growth expected at 10%-15% through 2020s before inflation. When adjusted for inflation, dividend growth turns negative in 2020s. Equities have outperformed dividends amid declining bond yields. Dividend index futures could be an inflation … Read More

Labor Market Anomalies and Red-Hot Housing Market

View in your browser Labor Market Anomalies and Soaring Home Prices By Blu Putnam, Chief Economist Erik Norland, Senior Economist CME Group Contradictions in the Labor Market About 30%, or seven million, of jobs lost to pandemic yet to be recovered. Some sectors unable to find workers in an anomaly of the economic recovery. More … Read More

Why are Bonds Calm About Inflation?

View in your browser Why are Bonds Calm About Inflation? By Erik Norland, Senior Economist, CME Group Has Quantitative Easing Distorted Treasuries Market? U.S. bonds muted even as June inflation rose to multi-year highs. Bond investors seem to share Fed view of rising inflation being transitory. Investors might feel supply chain disruptions and labor shortage … Read More