Tips breakevens are driven by liquidity and hedging effects more than inflation expectations (which is why they are highly correlated to anything growthy eg stocks).
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if they aren’t then there would be a pretty easy arb… maybe there is an easy arb idk but there’s a difference between what the price is or represents and the mechanisms by which the market arrives at that price
They are nowhere near dividend expectations (in fact the curve is almost always backwardated whereas dividend expectations are almost always upward sloping). Try to construct the arb and you will soon figure out why there isn't one.
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Yeah, some aggregate opinion of “where does the market think dividends will be” as opposed to “what are they willing to pay for a future on those dividends”.
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french banks hate him
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wouldn’t really be an arb, you’d just be making a bet that (for instance) divs will grow rather than decline over time. but unless there are clear pathologies in the market i think it’s hard to say that market prices (eg dividend swaps) don’t reflect market expectations.
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You can make that bet (i.e. buy dividend futures priced below expectation) and you will be right most of the time, but you are just taking on a bunch more exposure to stocks (i.e. the times you are wrong and divs fall will coincide with big stock market crashes)
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