US inflation expectations drop to 18-month low ahead of Core PCE Price Index
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US inflation expectations remain pressured on Thursday, despite the rush to risk safety and hawkish Fedspeak, which in turn propelled the US Treasury bond yields.
That said, the inflation precursors, as per the 10-year and 5-year breakeven inflation rates per the St. Louis Federal Reserve (FRED) data, dropped to the lowest levels since early March 2021.
While noting the details, the longer-term inflation expectations dropped to the lowest level since March 01, 2021, whereas the 5-year benchmark slumped to the lowest levels since February 2021 with the latest figures being 2.19% and 2.78% respectively.
The US Dollar Index (DXY) justifies the downbeat inflation expectations while marking another negative day to refresh the weekly low of around 111.95.
Moving on, the Fed’s preferred inflation gauge, namely the Core Personal Consumption Expenditure (PCE) Price Index for August, expected 4.7% YoY versus 4.6% prior, will be crucial for the market players to watch for fresh impulse.
Also read: Forex Today: Gear up for more market turmoil
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