The Bond Market Is Telling Us Not to Worry About Inflation

Back in early summer, the inflation hawks on the Federal Reserve’s rate-setting committee were trumpeting the latest pricing data as evidence that inflation was beginning to infect the economy. “The latest numbers suggest that inflation has bottomed out and is moving toward the committee’s target. I expect that firming trend to continue this year,” Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, said in early July.

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