Latest News

Inflation Expectations Surge to Highest in More Than a Decade

0
Economy5 minutes ago (Oct 21, 2021 14:36)

2/2
© Bloomberg. The U.S. Treasury building in Washington, D.C., U.S., on Sunday, Oct. 3, 2021. The global economy is entering the final quarter of 2021 with a mounting number of headwinds threatening to slow the recovery from the pandemic recession and prove policy makers’ benign views on inflation wrong. Photographer: Samuel Corum/Bloomberg

2/2

(Bloomberg) — Market-implied expectations for U.S. inflation for the next half-decade surged to the highest in 15 years on Thursday amid the latest increase in commodity prices.

As some U.S. Treasury yields attained multimonth highs this week, demand for inflation-protected Treasuries has kept their yields relatively stable. The difference represents the inflation rate needed to equalize their returns.

For five-year maturities, the regular Treasury note’s yield reached 1.192% Wednesday, the highest level since March 2020. The five-year TIPS yield is around -1.70%, and a $19 billion sale of the securities ahead at 1 p.m. New York time may draw a record low auction yield. 

The 2.86 percentage-point difference between the two rates reached Thursday is the highest since 2005. Ten- and 30-year breakeven inflation rates reached multiyear highs this week as well. 

“Although there will be plenty of evidence that current inflation pressures are transitory, what we do see is a higher inflation rate on average next year than we’ve been used to for the last decade,” said Peter Chatwell, head of multi-asset strategy at Mizuho International Plc. “That’s the paradigm shift.”

Oil fell Thursday, but remains near a seven-year high.

©2021 Bloomberg L.P.

Inflation Expectations Surge to Highest in More Than a Decade

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Yen Recovering, Swiss Franc Rises in Consolidative Markets

Previous article

UK’s Johnson says N.I. Protocol needs resolving ‘pretty fast’

Next article

You may also like

Comments

Leave a reply

Your email address will not be published.

More in Latest News