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TIPS expectations of inflation over the next 5 years has fallen by 23 basis points since mid-July. To me this means that opinion among these people who are betting real money one way or the other, has shifted a bit more toward the Fed failing to achieve the soft landing and infect pushing us into recession and a period of under-target inflation. Of course, TIPS folks have no perfect crystal ball about what the Fed will do or the effects of what it will do will have.

I still hope that the Fed will not further increase rates and that a recession will not develop, but that is looking a little less likely.

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