Markets Are Underpricing Inflation Risk - The February CPI Preview

Damir Tokic13.35K FollowersFollow5ShareSavePlay(8min)CommentsSummaryThe CPI inflation is expected to fall near the Fed's 2% target; however, other measures of inflation like PCE and PPI point to a much higher inflation.The market-based inflation measures price a well-anchored long-term inflation, despite the inflationary macro picture currently unfolding with the energy price spike.Thus, investors are underpricing inflation risk, and interest rates should be higher. Rasi Bhadramani/iStock via Getty Images Consensus Expectations - Near The 2% Target The U.S. BLS is set to release the February CPI inflation report on March 11th. The consensus expectations are: The core CPI to increase by 0.2% MoM, which would This article was written byDamir Tokic13.35K FollowersFollowCommodity Trading Adviser (CTA), member of National Futures Association. Professor of Finance, research on Global-macro issues. Editor-in-Chief, Journal of Corporate Accounting and Finance.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.