US inflation expectations rally to 14-week high

US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, don’t comply with the recently easing Fed chatters as the gauge jumped to the highest since November 23 on Monday.

That said, the inflation expectations marked a 2.62% figure by the end of Monday’s North American session.

The jump in the inflation expectations could be linked to the ongoing Russia-Ukraine crisis.

On the contrary, CME’s FedWatch Tool marked nearly 5.0% probabilities of a 0.50% Fed rate hike in March, versus more than 50% before a few days. While considering this, Atlanta Fed President Raphael Bostic said on Monday, “Today I am in favor of a 25 bps move at March meeting."

It’s worth noting that US President Joe Biden is up for discussing inflation in the State Of The Union (SOTU) speech on Tuesday. Should Biden highlight the rallying inflation expectations and hint at a faster Fed rate-hike, the US dollar will have a reason to consolidate recent losses.

Read: Global financial system on the brink