Discover and read the best of Twitter Threads about #breakevens
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While our February 18th monthly client call argument for rising #RealRates appeared prescient, we were surprised by the magnitude of last week’s #move and would expect a more benign evolution toward #equilibrium going forward.
Taking a stab at periodizing the past year: 1) in Feb/Mar 2020 the Covid crisis was priced into #markets, real #rates spiked higher, #inflation breakevens collapsed and #investors scrambled to raise #cash as the #SPX experienced its fastest 30% drawdown in history. 
We saw a modest 0.1% gain in headline #CPI this morning, a slightly firmer 0.2% gain in core CPI, yet already this report is a story of “that was then, and this is now,” since the #coronavirus and #oil price shock are altering the #economic landscape.
Fascinatingly, the decline in inflation #breakevens implies a world that simply doesn’t believe #inflation is rising, and based on market pricing, instead believes it is falling quickly toward not only short-term, but even longer-term, #disinflation.
