Behind The Markets Podcast: Trevor Greetham
Behind the Markets Podcast
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Bond Tips Yields - Are They Attractive?
Central banks think about liquidity and inflation separately. They were actually buying gilts to bring gilt yields down. Announcement came out unexpectedly in the middle of a bond auction. But they capped gilt yields using their liquidity provision. If you look at the breakeven inflation rate implied by the index linked gilts compared to conventional gilts, it's 3% or 4%. The markets are factoring in 3%, not 2%.
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