Mike Ashton on How the Market Expresses Inflation Expectations

Investors often use inflation swaps and breakevens — the difference in yields between nominal Treasuries and TIPS — to deduce market participants’ inflation expectations. These measures also change from new TIPS issuance, shifting inflation risk, and a liquidity premium, however, making them imprecise gauges of estimates for future inflation. In this episode, we talk with Mike Ashton, Managing Principal at Enduring Investments, about how TIPS and swaps compensate investors for inflation, how closely they reflect inflation expectations, and what they tell us about expectations for the War in Iran.

Simply Put: Expert perspectives on the trends influencing fixed income, banking, and the macro landscape, hosted by FHN Financial’s Macro Strategist, Will Compernolle. Tune in to better understand what’s moving the markets and what to keep an eye on in the weeks and months ahead. Listen and subscribe wherever you get your podcasts.

Will Compernolle is a Macro Strategist at FHN Financial. He writes daily commentary on interest rate strategy, hosts the strategy-focused podcast for FHN Financial, Simply Put, and presents to customers about the most important drivers shaping the macroeconomic environment. Will is frequently quoted in the media, including Bloomberg, Marketplace, CNBC, and the Wall Street Journal. He has a master’s degree in economics from New York University and an undergraduate degree in economics from the University of St. Andrews in Scotland.