US inflation expectations grind higher around record top amid hawkish Fedspeak

US inflation expectations, as per the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, rose to 2.90% by the end of Monday’s North American trading session.

In doing so, the inflation gauge regained upside momentum after declining on the previous day. That said, the

It’s worth noting that the inflation expectations rallied to an all-time high of 2.94% on March 11, 2022, but have been struggling afterward.

Even so, the inflation fears propel the hopes of the Fed’s 0.50% rate hike. As per the CME’s FedWatch Tool, there are 60% probabilities favoring such an outcome during May’s Federal Open Market Committee (FOMC).

That said, the recent Fedspeak has also been hawkish, fueling the US Treasury yields to a fresh three-year high. However, the US dollar struggles to cheer the run-up in bond coupons despite printing the two-day uptrend of late.

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