US inflation expectations retreat from multi-day top

Markets remain dicey during early Tuesday as traders await the key Testimony from Federal Reserve (Fed) Chairman Jerome Powell, especially due to the challenges for the Fed’s hawkish monetary policy caused by the recently mixed US data and Fed talks.

While the geopolitics and Fed concerns are mixed, the trend from inflation precursors can allow Fed Chair Jerome Powell to defend the hawkish stance and recall the US Dollar buyers.

That said, the US inflation expectations per the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED) remain firmer around the monthly highs marked the previous day. It’s worth noting, however, that the benchmark inflation precursors eased ahead of the event.

10-year inflation expectations per the aforementioned measure retreated to 2.49% by the end of Monday’s North American trading session, after refreshing a four-month high to 2.52%. on Friday.

On the same line, the five-year US inflation expectations rose to the highest levels since late October 2022 on Friday before easing to 2.70% on Monday.

Also read: Forex Today: Markets remain choppy as Powell takes centre stage