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Macro Developments Since Nov FOMC - Inflation: Surveyed Expectations Whip [2/2]

US OUTLOOK/OPINION
  • Despite this progress, surveyed consumer inflation expectations saw a surprise strong increase in November.
  • 1Y expectations jumped in the flash release before further extending the increase in the final reading, at 4.5% marking the highest since April. The 5-10Y measure meanwhile increased to 3.2% to push outside of its typical 2.9-3.1% range and for also its highest since 2011.
  • However, raising concerns as to just how much the survey is impacted by gasoline prices, both 1Y and 5-10Y expectations then surprised much lower in the preliminary December release, with the 1Y at its lowest since Mar’21 and the 5-10Y of 2.8% at its lowest since Sep’22 and before that Jul’21.

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