TLT/TIP Inflation Indicator Wonders Why The Fed Is Raising Rates

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December 15, 2017 6:16am NYSE:TIP

From Chris Kimble: The Fed raised rates this week, but was it necessary for them to do that? Humbly, the answer will come in time.


Below looks at the inflation indicator and how it is testing a key price level:

This inflation indicator (TIP/TLT) has been heading lower overall lower, inside of falling channel (1), for the past 5-years. It hit the top of the channel at the start of this year and has been heading south most of the time.

The inflation indicator is now testing this year’s lows for the third time at (2). If support would give way, it would suggest a softening in this theme.

If support would break at (2), could this indicator be questioning the idea of the need to raise interest rates? Could be. Stay tuned as we will continue to update the message coming from this indicator in weeks and months to come.

The iShares Barclays TIPS Bond Fund ETF (TIP) was unchanged in premarket trading Friday. Year-to-date, TIP has gained 1.71%, versus a 19.95% rise in the benchmark S&P 500 index during the same period.

TIP currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 13 ETFs in the Inflation-Protected Bond ETFs category.


This article is brought to you courtesy of Kimble Charting Solutions.


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