Chart from Haver Analytics supports their arguments on subdued inflation.
These five factors – loss of momentum, monetary restraint, high debt levels, flat profits and excess capacity – will bring about slower growth and continue to subdue core inflation.
Over the past 65 years, yields on long dated risk-free U.S. treasury securities moved in the same direction as core inflation on an annual basis roughly 80% of the time. We believe that there is a high probability that this relationship will hold in 2020 as inflationary pressures continue to subside.
