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Nordea: Fed Likely To Take New Initiatives re: AIT-Regime

US TSYS/TIPS

Nordea believe that "the Fed is likely to take new initiatives to signal that they mean business in this new AIT-regime. If inflation is supposed to average above 2% for a while, we probably need even easier conditions to get there. The most obvious weapon of choice would be to continuously buy TIPS at a larger scale than issuance, while a more exorbitant choice could be to buy commodity futures in a direct attempt to prop up prices. We bet on an increased TIPS purchase tempo (and a generally higher purchase pace of US Treasuries) on the other side of the election."

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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