The Macro Charts You Must Know #4

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The week in a nutshell:

Perceived Fed dovishness after this week’s FOMC meeting, and a US GDP miss, see markets try to price in reflation
- USD moves lower against most other currencies
- Commodities move higher, with Copper the standout, breaking out of its recent range
But global yields are still falling, or remain at very low levels – indicating that growth prospects remain muted
- US breakeven rates are the exception, moving higher and implying higher inflation
Low yields signal low growth; but higher commodities and higher breakevens signal higher inflation:
- Low growth + High inflation = Stagflation