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Morning Notes — Inflation Expectations and the SPX

Inflation Expectations and the SPX

July 11, 2022

Ten year inflation breakeven yields have moved sharply lower since crossing below technical support at 280bp.  Now at 233bp, ten-year breakeven yields and elevated nominal yields (10-year at 3%) have driven 10-year real yields to 0.66 from 0.89 in mid-June.  The decline in real yields has led to some modest outperformance in Tech over the last 3 weeks.  That outperformance should start to accelerate once 10-year real yields move below 0.36.

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