Real Return XII: The Inflation Linked Products Conference 2018 | Euromoney Coneferences | 5 September 2018 |

Inflation is back! And it is returning with a vengeance. According to the US Department of Commerce, annual headline inflation hit 2.1%, surprising the market with a higher rate than expected for the second month in a row. Rising inflation is a sign of a strengthening economy - which is surely a positive thing - so why is there cause for concern?

The rise in inflation has been attributed to a number of factors, firstly being President Trump’s US tax overhaul – cutting corporate and personal income tax rates which in turn is sparking an increase in consumer spending. Secondly, rising commodity prices are adding fuel to the fire. And finally, the weakening of the US dollar.

These higher than expected figures are leading to expectations that the Fed will tighten monetary policy much more quickly than first thought. In 2017 the Fed raised rates three times, and we expect more rises in 2018 under the order of the new Fed Chair, Jerome Powell.

Markets are nervous, but volatility is remaining low. With long dormant inflation on the rise and the changes in the way the Bureau of Labor Statistics measures data, investors are likely to see this change. Is it a sign of the economy going crazy? Or just a case of signal vs noise?

Nevertheless, it is important investors protect themselves from the risk of inflation. TIPS and inflation-linked bonds issued by sovereign governments such as the US and the UK are indexed to inflation, and therefore interest rate payments follow the rise and fall. Approaches can vary depending on an investor’s tolerance to volatility, providing favourable diversification for investors.

2018 Speakers

Nicholas Steele
Deputy Director, Office Of Debt Management, US Department of the Treasury

James Bullard
President, Federal Reserve Bank of St Louis

Michelle Meyer
Head Of Us Economics, Bank of America Merrill Lynch

Seth Carpenter
US Chief Economist, UBS

David Mericle
Managing Director, US Economics Research, Goldman Sachs

Michael Ashton
Managing Principal, Enduring Investments

Ivan Busharov
Director, US Inflation Trading, UBS

Mark Capleton
Head Of Inflation And UK Rates Strategy, Bank of America Merrill Lynch

Charlie Corbett
Editorial Director, Euromoney Conferences

2018 Sponsors

LEAD SPONSORS
• Bank of America Merril Lynch
• UBS

CO-SPONSORS
• BNP Paribas
• Goldman Sachs
• Societe Generale

ASSOCIATE SPONSOR
• Jefferies