Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
The Federal Reserve would not be adverse to longer run inflation expectations 'just being a touch higher' Minneapolis Fed research director Mark Wright told MNI in an an interview published late Friday.
Bond breakeven rates around 2.5% over five years and slightly lower over ten years signal that investors see the Fed reaching its goal of a modest inflation overshoot, Wright said. Other measures of consumer expectations remain modest and market rates also signal long-term expectations for PCE inflation at about 1.7%, he said.
US 5-year Inflation Expectations
Source: Bloomberg
"The problem has been we can't get inflation up, and so I think that just tells us that we don't want to react too soon or overreact to a temporary increase in prices, as long as we are away from our maximum employment goal," Wright said.
US 5-year Inflation Expectations 5-Years Forward
Source: Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.