Dollar, Bond Yields Tumble As Inflation Expectations Crash To Record Lows

Tyler Durden's picture

Having warned in Novemeber 2015 of a "deflationary mindset", University of Michigan survey director Richard Curtin notes that things have done nothing but get worse.

While reflation trades run amok in capital markets, real people's expectations of inflation in the medium-term has collapsed to its lowest on record...


In the latest massive setback for the Federal Reserve, which is desperate to break the recent "deflationary mindset" to have gripped the US population (see Japan for the results), long term inflation expectations declined to the lowest level since 1980: an annual rate of 2.2% was expected in the next five years, down from 2.5% last month and 2.3% in December. Just 6% expected long term deflation. These lows were supported by the fewest complaints of rising prices eroding their living standards—just 6%, the lowest since 2002 and barely above the all-time low of 4%.

And this has driven bond yields lower...


And is weighing on the dollar...


The Dollar Index is very close it slowest since the election - seemingly erasing the hope of reflation and exuberance.

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venturen's picture

can hardly wait for negative inflation from the crooks at the FED

Silver Bug's picture

People should be getting out of the horribly flawed fiat dollar as they can. Precious metals in the long run, are the only form of money that willl stand the test of time, as they always have done. Precious metals are set to move much higher under Trump.

BullyBearish's picture

surveys are ALL policy/propaganda tools to further the banker's agenda against the people...

Luc X. Ifer's picture

The article title is BULLSHIT I can tell you that all top range performers in their field in Canada are looking to leave and move to US or Western Europe, only mediocre and low range performers love Canada because they can make it using the politically correct ladders to survive and climbe.

Got The Wrong No's picture

"While reflation trades run amok in capital markets, real people's expectations of inflation in the medium-term has collapsed to its lowest on record..."


Who the hell are these "Real People" and where can I find one???

GUS100CORRINA's picture

Just one thought came to mind with this article ...

"Figures lie and liars can figure."

They must have sampled MARTIANS or aliens on the incoming NEMESIS Solar System. We are in a STAGFLATION environment.

Definition of Terms ...

What is 'Stagflation' A condition of slow economic growth and relatively high unemployment – economic stagnation – accompanied by rising prices, or inflation, or inflation and a decline in Gross Domestic Product (GDP).

It appears from the above defintion, STAGFLATION has arrived with 93+ million people out of the labor force. Shadowstats unemployment rate: 22.7%. Shadowstats inflation rate: Over 6% (Metrics on the first page under tabs of EMP, CPI, M3)

Special Note: Government statistics like U3 for unemployment are total and utter BS!!!!

This data probably fabricated to give Janet cover and justification for no future rate hikes.

wisehiney's picture

Be right and sit tight.

Get paid to wait.

small axe's picture

a lot of morons out there

ejmoosa's picture

If gas prices are higher than the last time they filled up, they expect inflation.

If gas prices are lower than the last time they filled up, they expect deflation.

That's more or less the only bench mark for those they are surveying.

Dr. Engali's picture

Funny how that "deflationary" trend started driftng downwards after the Bernank left. Now there's a man who knew how to Ctrl-P.

jamesmmu's picture
Something big is afoot in Shanghai, the Chinese have changed the game suddenly.

Soul Glow's picture

If stocks drop everyone knows right away, if bonds drop people find out on their quarterly statements, if the dollar drops people can't figure out what the fuck happened for years.  Dollar devaluation is the stealth wealth tax.  It could continue, and en masese, for the next few years.

adr's picture

Easy, goods have now become so expensive that people don't even bother believing they can afford them.

When pants made in Bangledesh that look like they are cut from paper shopping bags cost $100 at Macy's, you just buy pants for $12 at Walmart because they will last longer.

Countrybunkererd's picture

soon we will stop wearing pants to buy food. or buy sawdust and seasonings to wear pants?  but we have a healthcare system!!

I will buy fabric and make my own pants before i go back to walmart.

MagicHandPuppet's picture

"Dis good fo' muh gubmint pension, rite?"

small axe's picture

Sadly, since you have been identified as one of the 500 people in the UMich survey who expect deflation, your Cost of Living Adjustment will be -4.9 percent this year. The compares to an actual inflation rate of 11%.


Yen Cross's picture

  There's tons of inflation out there, just not the good kind.

BigWillyStyle87's picture
BigWillyStyle87 (not verified) Mar 17, 2017 9:41 AM

Deflationary expectiation eh? Last i checked, the fed funds rate is still lower than what Alan Greenspan lowered it too after the dotcom bubble burst (1%) and has been for 8 fucking years.


These reports serve no purpose other than to try and piss people even more. 

Marshall Planz's picture

Helloo, I'm a hedge fund, I-want to eat your children ~ If that's Okay with you then give me everything you've got and I'll give you back 10% each year until you die, which will most likely be in 'WW3' for 1\3 of you and not that much later for the rest of you ~ It's a hell of an investment, right? ~ So that's "You invest everything you've got and we'll give you back 10% a year until we kill you, but we get to eat your children either way" ~ If interested, contact 'George' at the George Soros "SAVE THE CHILDREN" foundation c\o Davros, Switzerland...


(C'Mom. might as well, we own them anyway and this way you're in on the ground floor before it goes viral)

Dilluminati's picture

Too many debts chasing too few dollars, sticky wages no real wage increase in a decade, REDUCED BENEFITS, matching 401K slashed to 4% of the first 6% from 6% matched, autol loans under water, student loans under water, naked pricing in respect to goods, as an example an IBM laptop priced next to a Acer one on Amazon, and then there is the wrist slashing of globalism, where AI now competes with humans and robots for the manual labor.

I only wish I had bought more of the 10 year CD at 2.9% of money I had to invest, the rest I left in cash.

Deflation is too many debts chasing too few dollars, that simple.  Add the other factors and what you have is clearly deflation.

Any economic analysis that misses that truth is not agnostic analysis but instead "animal spirits."

I missed some of the froth of the animal spirits but I sure as hell was out with the profit and now will run the 10 year route and buy the expected lows.

markets only function profitably when you buy low and SELL high.

Never was a better day to lock in 2.9% for 10 and maturity FDIC insured, and cash.. let me tell you a truth.. cash is king and is staying king.

Sad to say this, I stack.. but in deflationary markets metals GO DOWN!  We live in a physical world, so next time that Silver hits 19 you sell and when it hits 14 you buy, it was mined to be used or bought and sold.

Animal spirits in metals as bad as nimal spirits in the market.


What could our current globalist sheme be if it were not for deflation?

99% of everything is owned by the 1% who do not share the debt equally.



whatamaroon's picture

I remember back in the days of getting 10% on a 1 year CD

Dilluminati's picture

That was under Jimmy Carter and allot has changed, I remember that also.

Don't want no Jimmy Carter, give me the Reagan years back or even the bubble of Clinton.

Funny thing how young people just don't have the corpus of investment knowledge old people have.


Marshall Planz's picture

If you were an American Indian who'd invested in Redwood shares in 1000 AD you'd be dead broke by now...

You're not allowed to cut them down anymore are you, the glory days of the mid 20th century are all over...

(Video is 10+ minutes)...

(Hunt it, kill it, eat it)...

Marshall Planz's picture

Never give up, never ever give up, look ahead, think ahead, plan ahead, I'm investing in "General Dynamics" plus BAE Systems Lockheed Martin Northrop Grumman Raytheon and the Boeing Company, then when I'm all stone cold dead and burned to a crisp before I'm crushed flat as a pancake after 'WW3' I'll be the richest corpse in my neighborhood...

Being Free's picture

You can pick up a 100 trillion Zimbabwe dollar note for only 89.99 U.S. 


Just saying

Atomizer's picture

Hahahahahaaa. Good post. 

Stormtrooper's picture

That would be 89.98 too much.

Marshall Planz's picture

Looks like President Trumpf could use Batman as US Fed Secretary, and maybe Robin as Treasury Secretary...

(Check out 'ANY' of their movies, they always clean up Gotham City in the end, the good guys always win)...

Look, I-realise they're only cartoons, but, you know that, might work, how will you know if you don't try? ;-)

(Vid 41 ses, and yes, serious)...

(No I'm not, does it matter?)...

1stepcloser's picture

All I know is a FRN dollar will buy less tomorrow than it does today..  regardless of inflatiion expectations

Silver Savior's picture

I see this in action daily. Dollar worthless. Nearly. People want this crap as savings? Not me.

Marshall Planz's picture

Didn't some banker-guy say something weird once like "Let me issue and control a nation's money and I care not who writes the laws as long as I've got controlling shares in it's major condom manufacturer", or is that quote been misquoted? ;-)

Dr.Engineer's picture

Everyone in this list needs to start talking about the Fed.  Only in darkness will roaches hide.  In the light, the great tennis show smasheth.

I am suggesting this because ZH posted yesterday that Capital Hill is asking for a Soros investigation.  It took years of jabbering but they took notice.  Everyone, start jabbering about the Fed.

LawsofPhysics's picture

LOL!!!  "Deflation", in what exactly? Be specific or shut the fuck up.

Deflation in plastic crap from china or financial "products", sure.  Deflation in anything that requires real work to create or that is required for a decent standard of living...  NOT GOING TO HAPPEN.


Dilluminati's picture

The markets are waaay overpriced in respect to earnings.. South Beach real estate is waaaay overpriced

try and push a widget through the economy and you hit deflation, try and service a loan under interest and you see deflation

lets see, rising interest hits




Credit Cards

Student loans


and that gets passed on as a cost to SERVICES

leave anything out?


deflation is too many debts chasing too few dollars

LawsofPhysics's picture

...and totally irrelevant once no one accepts your currency.

"Full faith and credit"

Marshall Planz's picture

So that was the "Full faith and credibility" line was it, yeah?

(Well shoot straight you bastards, Don't make a mess of it)...

(video 52 very weird secs)

katchum's picture

Deflation is good for the U.S. dollar. Why is it dropping?

I Write Code's picture

Well well, by some odd coincidence this makes it look like bumping up rates a full point will be absolutely harmless, ... which is not exactly true but close enough for government work, which this is.

Silver Savior's picture

I wish I could see deflation at the grocery store and everywhere else where money is involved. Only trolls talk about deflation. I am concerned with hyper inflation at the moment. Not really concerned because I prepped but concerned for seniors and the disabled on fixed incomes.

Marshall Planz's picture

Raise interest rates? = Raise the Fed debt...

$20 trillion is what you borrow from the Fed...

But it's what you borrow to pay the interest... 

Spend 2 Mins 30 secs educating yourselves...

Learn how your money is 'REALLY' made...

Yes, these are 'Both' Australian comedians...

(One was a Kiwi, but he's all our's now)...