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Saturday, February 14, 2009

US inflation expectations starts to creep upwards

The fear of deflation is beginning to wain. After falling for five straight months, US inflationary expectations are again starting to rise. This is consistent with a recent trend in the bond market, where long term yields on government paper have also increased.

Could it be the combined effect of a massive fiscal spendfest and the Fed's threat to crank up the printing presses?

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