Inflation expectations in the US can be held responsible for the market’s gloom and the US dollar’s bearish behavior on Tuesday.
Having said that, inflation expectations, based on 10-year and 5-year inflation rates based on data from the Federal Reserve of St. Louis (FRED), fall to the lowest levels in a weekwhile marking a losing streak of three days.
It should be noted that inflation expectations at 5 and 10 years, according to the aforementioned calculations, they fall to 2.09% and 2.17%, which in turn leads to speculation about the possibility of witnessing a bearish figure for the US Consumer Price Index (CPI) for May. This would support the dovish bias of the Fed and could push back dollar bulls, who have been avoiding entering the market of late.
Aside from likely weak US inflation data and an anticipated drop in the dollar ahead of the Federal Open Market Committee (FOMC) on Wednesday, US inflation expectations also justify the recent pullback in US Treasury yields, as well as sluggishness in S&P 500 futures.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
