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Consumer Long-Term Inflation Expectations Edge Lower

US DATA
  • U.Mich consumer inflation expectations 5-10 years out were trimmed in the final Feb report from a preliminary 3.1% to 3.0%, having increased 0.2pts in Jan to 3.1%, the highest since Mar 2011.
  • 5Y breakevens remain very elevated (white line below) although 5y5y inflation swaps (yellow line) are still well-anchored.
  • Note BBG hasn't yet updated the U.Mich series (purple line).

U.Mich 5-10Y inflation expectations, 5Y breakeven, and 5Y5Y inflation swap. Source: Bloomberg

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