Thursday, July 10, 2008

Inflation preoccupation overdone?

Merrill's Richard Bernstein says it's curious that investors are paying so much attention to the inflation rate, a "notorious lagging indicator." Inflation, he says, may be a "lingering effect of yesterday’s credit bubble." With credit tight, inflationary pressures may become more "benign" going forward. Relatively strong performance in bonds also suggests that the market is not anticipating much inflation. Bond managers all believe rates will go higher, Bernstein says--a contrary indicator that points to a likelihood of lower rates in the future.

0 Comments:

Post a Comment

Subscribe to Post Comments [Atom]

<< Home