Despite The Fed’s Jim Bullard proclaiming last week that inflation expectations had rebounded (by which we assumed he meant the Dow), 5-year forward 5-year inflation expectations just dropped in the US to the lowest since 2008. The rest of the world is no better. In spite of promised and delivered policies Japanese and European inflation expectations are also near multi-year (if not all-time) lows… which must mean only one thing – we need moar money printing.

Inflation expectations falling everywhere… (the 5Y5Y fwd inflation breakevens are often cited as The Fed’s preferred market indication of inflation expectations)

So it must the Dow that Bullard is watching…

Charts: Bloomberg

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