Eurozone inflation has strengthened less than swaps imply, paper says
Analysts should be wary of interpreting rises in the value of inflation swaps as a sign of higher market inflation expectations, a working paper published by the Bank of Finland argues.
In Have market inflation expectations strengthened? Tomi Kortela argues that the interpretation of inflation swaps “is not, however, straightforward”.
The author argues that analysts should treat swap prices in largely the same manner as they do interest rate data. He analyses recent eurozone inflation swap
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