Cathie Wood Predicts Inflation Could Drop to Zero, 35% Upside for Long-Term Bonds
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- Inflation Prediction: Cathie Wood recently stated that inflation could drop to zero if oil and rent prices continue to fall, which would significantly impact economic growth and interest rates, potentially triggering a bull market in long-term bonds.
- Long Bond Potential: With the current 10-year breakeven inflation rate at approximately 2.3%, if inflation falls to zero, long-term bond yields could decrease by 2.3%, implying a potential 35% increase in the value of the iShares 20+ Year Treasury Bond ETF.
- Interest Rate Sensitivity: The iShares 20+ Year Treasury Bond ETF has a duration of about 15.5 years, meaning for every 1 percentage-point decrease in interest rates, the ETF's value is expected to rise by 15.5%, further validating Wood's prediction.
- Economic Context: As the labor market cools and the manufacturing sector contracts, overall demand appears to weaken, which could lead to lower inflation rates, with artificial intelligence potentially acting as a positive catalyst for the bond market.
Analyst Views on TSLA
Wall Street analysts forecast TSLA stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for TSLA is 401.93 USD with a low forecast of 25.28 USD and a high forecast of 600.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
30 Analyst Rating
12 Buy
11 Hold
7 Sell
Hold
Current: 438.570
Low
25.28
Averages
401.93
High
600.00
Current: 438.570
Low
25.28
Averages
401.93
High
600.00
About TSLA
Tesla, Inc. designs, develops, manufactures, sells and leases high-performance fully electric vehicles and energy generation and storage systems, and offers services related to its products. Its segments include automotive, and energy generation and storage. The automotive segment includes the design, development, manufacturing, sales and leasing of high-performance fully electric vehicles, and sales of automotive regulatory credits. It also includes sales of used vehicles, non-warranty maintenance services and collisions, part sales, paid supercharging, insurance services revenue and retail merchandise sales. The energy generation and storage segment include the design, manufacture, installation, sales and leasing of solar energy generation and energy storage products and related services and sales of solar energy systems incentives. Its consumer vehicles include the Model 3, Y, S, X and Cybertruck. Its lithium-ion battery energy storage products include Powerwall and Megapack.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
