Commodities and Inflation Expectations

The CRB index is in a minor disconnect from inflation expectations (RINF)

It’s a disconnect on the short-term, at least. If/as the reflation continues CRB could have some catching up to do. CRB has been a near perfect side car to the inflation expectations (IE) cycle until recently. Crude oil’s volatility of late has contributed to the ruptured connection, along with base metals getting roughed up.

The alternative view is that CRB sees IE as blowing off and is taking cover. But since CRB’s trend is up that is the favored lean for both it and IE at this time.

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