Investing For A Recession-Free Future | Vincent Deluard on Secularly-High Inflation, China’s Currency Crisis, and The Long-Term Debt Cycle
Forward Guidance
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Long TIPs Trade Analysis
The long TIPs trade involves betting on inflation and real rates. The strategy includes hedging by holding treasuries simultaneously to mitigate risks. The trade offers positive carry due to the current high inflation environment, enabling a small percentage of profit. The trade was influenced by Kevin Muir's analysis on the correlation between 60/40 portfolios. While the trade involves more volatility due to the mismatch in duration between TIPs and treasuries, it aims to capitalize on the steepening yield curve. For a less volatile option, the Bloomberg 10-year break-even strategy is suggested.
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