US inflation expectations print three-day pullback from 15-year top

US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, dropped for the third consecutive day from levels last seen during August 2006 by the end of Friday’s North American trading.

In doing so, the risk barometer fades recovery moves from late September while flashing the 2.51% mark at the latest.

It should, however, be noted that the firmer inflation data and hopes of the Fed tapering keep the US Treasury yields stronger even as inflation expectations step back from a multi-year high. That said, the US Core PCE Inflation data remained firmer around 3.6%, versus a 3.7% market forecast, for September.

It’s worth noting that the US dollar jumped the most since mid-June on Friday and is up 0.06% around 94.18 by the press time of early Monday with eyes on Wednesday’s US Federal Reserve (Fed) meeting.

Given the firmer price pressure, the recent easing in the inflation expectations may not dampen the Fed tapering concerns. However, the further moves should be watched closely for fresh impulse and stronger clues for Wednesday’s Fed event.

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