US inflation expectations rebound from six-week low

US inflation expectations, as per the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED) data, justify the market’s latest reassessment of the Federal Reserve (Fed) concerns by bouncing off the multi-day low on Monday. In doing so, the inflation precursors favor the easing talks of the Fed’s policy pivot, as well as the rate cut, during 2023, which in turn underpin the US Dollar’s strength.

Also read: US Dollar Index: US debt ceiling fears prod DXY bulls above 102.00 as full markets return

That said, the Five-year and 10-year breakeven inflation rates from the St. Louis Federal Reserve (FRED) bounced off the lowest levels since March 20 to 2.24% and 2.23% respective figures by the end of Monday’s North American session.

The latest recovery in inflation precursors joins the market’s fears of US debt ceiling expiration, as well as a relief from the First Republic Bank crisis, to help the US Dollar. However, the return of the full markets after Monday’s holidays in major bourses joins the cautious mood to prod the greenback buyers.

With this, the US Dollar Index (DXY) struggles to defend the week-start run-up near the highest levels in a fortnight, staying defensive near 102.10 by the press time.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.