A trader works behind plexiglass on the floor of the New York Stock Exchange (NYSE) in New York City, New York, U.S., July 28, 2021.

Andrew Kelly | Reuters

LONDON — Markets no longer fear inflation and are now focused on the spread of the delta Covid-19 variant, according to HSBC Wealth Management.

In a note Thursday, Chief Investment Officer Xian Chan said that after a period of concern about persistent higher inflation, with investors assessing whether the U.S. Federal Reserve may be forced to tighten monetary policy, markets appear to have gotten used to the concept.

Xian pointed out that while U.S. consumer price inflation remained high at an annual 5.4% in July, the 10-year U.S. Treasury yield has declined, indicating that markets have “nothing to fear but fear itself” when it comes to inflation.

“There is normally a direct relationship between bond yields and inflation expectations. If inflation is expected to be higher, then…

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