, Columnists
For a Return to the 'Old Normal,' Real Rates Must Tick Higher
After Trump’s election, option prices signaled greater inflation risk. That no longer seems to be true.
Waiting for the Fed announcement on rates.
Scott OlsonThis article is for subscribers only.
With inflation back around 2 percent in the U.S. and the Federal Reserve moving away from its years-long policy of monetary accommodation, something like economic normality is beginning to return. But to truly get back to the “old normal,” real interest rates must play catch up, and that’s likely to take a while.
Although President Donald Trump initially signaled quick implementation of new tax, trade and regulatory policies and, most importantly, infrastructure spending, his focus has turned to social and foreign issues, leading to a shift in options prices, which convey important information about changing risks.