68.3 US Treasury Auction Brings Surprisingly Bad News
———Part 3 Summary———
On April 23 the 5-year US Treasury Inflation Protected Security auction resulted in LOWER inflation expectations. For years now these auctions conveyed RISING market-based inflation expectations. But now? With monetary ‘printing’ and fiscal ‘stimulus’ gone wild the market says, “Put your shirt back on.”
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———Ep 68.3 Topics———
01:58 Treasury Inflation Protected Securities are not auctioned very frequently
02:35 The late-April 5YR TIPS auction had a heavy bid from foreign official institutions
04:11 The infrequency of TIPS auctions means that when one does occur it can reset perceptions
05:11 What does it mean when a TIPS auction is a “reopening”.
06:15 The Apr-2014 5-Yr TIPS auction raised inflation expectations.
08:38 The Apr-2015 5-Yr TIPS auction raised inflation expectations.
09:40 The Apr-2017 5-Yr TIPS auction raised inflation expectations.
10:35 The Apr-2018 5-Yr TIPS auction raised inflation expectations.
11:53 The Apr-2019 5-Yr TIPS auction did not raise inflation expectations (stayed the same).
12:40 The Oct-2019 5-Yr TIPS auction raised inflation expectations.
14:07 Indirect bids represented foreign bids behind the rising inflation expectations.
15:19 The Apr-2021 5-Yr TIPS auction LOWERED inflation expectations!! Wait, wut?!
17:25 The financial media did not sound the alarm about this peculiar TIPS auction – at all
18:39 Final concluding, summarizing thoughts by Jeff.
———Ep 68.3 References———
Jeff Snider, Head of Global Investment Research for Alhambra Investments and Emil Kalinowski, TIPSy broadcaster. Art by the nice version of Gordon Ramsey, David Parkins. Podcast intro/outro is “Pa Na Ma” by Giants’ Nest at Epidemic Sound.