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An Encouraging Dip In NY Fed 3Y Inflation Expectations

US DATA
  • The June survey of NY Fed consumer inflation expectations saw the 1Y ahead measure hit a new series high of 6.8% but more importantly for the FOMC, the 3Y ahead measure fell three tenths to 3.6% and further below highs of 4.2% from Sep/Oct’21.
  • That compares to the U.Mich longer-term measure tied at recent highs of 3.1% (having shocked with a jump to 3.4% in the flash release just prior to the June FOMC), with the July preliminary figure eyed closely on Friday.
  • This comes after market-based measures of inflation expectations have fallen notably, with both 5Y and 10Y breakeven rates below pre-Ukraine war levels and back at pre-taper levels at 2.56% and 2.32% respectively.

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