Apr

27

Bernanke has inflation credibility, just not the kind he wants.

One British bank says you can sell a zero-strike floor on US y/y inflation, and buy low yield LIBOR floors at flat or for a small credit. Why do this? "If inflation becomes too low, Fed cuts rates aggressively and increases value of LIBOR floor while raising inflation."

Firmly anchored expectations, with real money on the table.


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