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Inflation and the Fed, What’s The Outlook for The Yield Curve?

9:00 AM – 10:00 AM ET

Inflation is proving to be much higher and especially much more persistent that the Fed hoped for; this has led to a rapid progression towards a very hawkish policy stance. There is no doubt that the Fed can bring inflation down, but there is also no doubt that there is a cost to it: the risk of recession is going up a lot. The market knows it, and the yield curve is the most inverted since the year 2000. The current Fed’s policy stance argues for the curve to remain inverted for several more months. However, when a Fed pause will come into view, the curve should start to re-steepen as the market will price in rate cuts in the not-too-distant future.

Learning objectives:

  • The drivers of inflation
  • How the Fed reacts to inflation
  • Why the Fed needs to remain hawkish at the moment
  • The connection between Fed policy and Treasury yield
  • Why more expected Fed tightening implies a more inverted yield curve
  • Odds of recession in the US
  • How the Fed will respond to a recession

Presented By: Roberto Perli, Head of Global Policy, Piper Sandler

This session offers 1 (one) credit of CPE; details on registration page.