Market-based measures of US inflation rise as Fed hints at rate cuts

The US 10-year breakeven rate jumped 5 basis points on Wednesday.
The Fed signaled pointed to possible cuts in the future.

Omkar Godbole FXStreet Contributor

The market-based measures of US inflation ticked higher on Wednesday as the Federal Reserve signaled readiness to cut rates later this year to counter sluggish domestic price pressures.

The 10-year breakeven rate or the yield spread between 10-year Treasury Inflation Protected Securities and regular 10-year Treasuries rose to 1.688% in the late US trading, up nearly 5 basis points from Tuesday, according to Tradeweb data. Despite, the recovery, the gauge was still down nearly 30 basis points from the high of 1.98% seen on April 25.

The breakeven rate had dropped to a 21-month low of 1.614% earlier this week, prompting markets to price in at least a 50 basis point rate cut before the year-end.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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