Aviva's Diebel: U.S. Inflation Outlook Biased to Upside

The video discusses the bond market trends in 2017, highlighting the shift in yields due to deflationary forces and secular stagnation. It examines the market reactions following Trump's election, noting the changes in yields and the approach towards fair value. The US inflation outlook is explored, considering full employment and potential fiscal policies. The Federal Reserve's increased rate hike expectations are analyzed, along with their implications for the economy and the yield curve.

What was a significant factor in the bond market's condition in early 2017?

• A decline in interest rates

• An increase in deflationary pressures

• A rise in bond yields

• A decrease in global economic growth

How did the Trump administration's policies affect the bond market?

• They caused an increase in inflation

• They led to a decrease in bond yields

• They resulted in a shift in yields

• They stabilized the bond market

Why did the Federal Reserve increase their expectation from two to three hikes in 2017?

• To stabilize the bond market

• Because of a fiscal package from the new administration

• To counteract a slowing economy

• Due to a decrease in inflation

What could be a consequence of the Federal Reserve's proactive measures?

• A change in the long end of the yield curve

• A reduction in economic growth

• A decrease in inflation

• An increase in deflationary pressures

What is the potential impact of the Federal Reserve tackling inflation?

• It might decrease economic growth

• It could increase deflationary pressures

• It might stabilize the bond market

• It could lead to higher inflation