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Market Inflation Expectations Creep Higher

US
  • Long-term inflation expectations measures are creeping higher today but remain very close to averages over the past month.
  • That’s especially so for the 5Y5Y breakeven of 2.41% and 5Y5Y inflation swap of 2.66%.
  • The 10Y breakeven is up slightly but has fallen from almost 3% early last week to 2.83%, in part as real yields tighten back towards pre-Russian invasion highs of circa -40bps.
  • Fedspeak from Governor Brainard and NY Fed’s Williams, with Brainard speaking for the first time since the FOMC.


10Y breakeven (white), 5Y5Y breakeven (yellow), 5Y5Y inflation swap (green) and Fed Funds futures implied rate after Dec'22 meetingSource: Bloomberg

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