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Stagflation Bogeyman Inspires Little Fear in Bonds at Low Yields

  • Bank of America’s survey show stagflation among top concern
  • Flat yield curve, Treasury breakevens rate say threat is empty

Stagflation emerged this week as a new bogeyman bearing down on the global recovery. Yet the bond market, an astute judge of the economy, doesn’t look scared.

The threat of crippling price increases accompanied by slow growth challenges the belief keeping global markets aloft: that price pressures are temporary along a Goldilocks-like growth trajectory.