US inflation expectations refresh to 15-year high

Having witnessed a 30-year high Consumer Price Index (CPI) print, 6.2% YoY, the US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, jumped to the fresh high since May 2006.

That said, the risk barometer jumped to 2.70% by the end of Wednesday’s North American trading. In doing so, the risk barometer extends the previous week’s rebound from the lowest levels since October 12, per the official website data.

The same propelled the US Fed rate hike concerns and underpinned the US 10-year Treasury yields to post the biggest daily jump in seven weeks, around 1.57% by the press time. Not only the firmer yields but equities also portray the market’s risk-off mood.

Even so, comments from Patrick Timothy Harker and Mary C Daly, respective Presidents of the Federal Reserve Bank of Philadelphia and San Fransisco, tried to defend the Fed doves. While Harker highlighted the possibilities of a rate hike even while tapering is on, Fed’s Daly said, per Reuters, that it would be premature to change the calculation on raising rates.

It should be noted, however, that the sour sentiment may weigh on the risk barometers like the AUD/USD and gold prices even if the US witnesses a baking holiday.

Read: AUD/USD flirts with monthly low under 0.7350, Aussie employment report eyed