US inflation expectations retreat from five-week high

US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, add to the market’s anxiety by recently easing from the highest levels since January 12.

In doing so, the inflation precursor fade the previous rebound from the three-month low, marked in late January, with the latest pullback from 2.48% to 2.46%.

It’s worth noting that the recent easing in inflation expectations joins the mixed comments from the latest Federal Open Market Committee (FOMC) Minutes as the policymakers backed rate hikes but showed no confirmations over the pace of it. “Federal Reserve officials agreed last month that it was time to tighten monetary policy, but also that decisions would depend on a meeting-by-meeting analysis of data, according to minutes of the most recent policy meeting,” reported Reuters.

Given the unclear FOMC Minutes and recently downbeat US inflation expectations, markets are likely to witness further grinding. The same could restrict the moves of the US Treasury yields, equities and the US dollar while benefiting the traditional safe-havens like gold.

Read: Gold Price Forecast: XAU/USD rebound aims $1,880 amid geopolitics, Fed-linked anxiety