US inflation expectations brace for fresh all-time high ahead of US PCE Price Index

US inflation expectations, as per the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, rose for the second consecutive day to 2.97% by the end of Thursday’s US session.

In doing so, the inflation gauge extends the mid-week recovery towards the record top marked on April 21, at 3.02%.

The following is the graphical representation of the 10-year and 5-year gauges of inflation expectations:

That being said, the same can bolster the odds of the Fed’s 0.50% rate hike on further upside moves, which in turn signals the US dollar’s additional north-run. It’s worth noting that the US Dollar Index (DXY) jumped to the highest level in 20 years while poking the 104.00 threshold.

Other than the FRED figures, today’s US Core Personal Consumption Expenditures Price Index for March also becomes important for the inflation view and the US dollar in turn,  expected to ease to 5.3% YoY versus 5.4% prior.

Also read: USD/JPY dribbles around 20-year high near 131.00 with eyes on US PCE inflation