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Inflation Expectations Back To Pre-CPI Levels

US
  • A recovery in real yields through the day has helped see the 5Y breakeven slide back closer to pre-CPI recent lows at 2.94% vs 2.91%.
  • There’s been a larger fall in the arguably more important 5Y5Y though, back to pre-CPI levels of 2.33% at a level not seen consistently since mid-Mar.
  • Falling towards the 2.15% averaged in the build up to the war in Ukraine and 2.20% in 2021, it continues to lend support to assertions that long-run inflation expectations are anchored.

5Y and 5Y5Y forward breakevenSource: Bloomberg

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