US inflation expectations remain steady around three-week high

Anil Panchal FXStreet

US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, stayed steady around the highest levels since December 08, at 2.50%, per the FRED website.

The firmer inflation expectations keep fears of the Fed’s early rate hike on the table, which in turn weigh on the market sentiment.

The risk-off mood also takes clues from the worsening virus conditions in the West amid the year-end holiday season.

As a result, the markets portray a mixed reaction to the risk-negative catalysts while keeping the bears hopeful.

That said, Wall Street benchmarks traded volatile as DJI managed to print a five-day uptrend but S&P 500 snapped a four-day winning streak even after refreshing the record top during early hours. On the same line, the US Treasury yields had an active Tuesday as a coupon for the two-year benchmark jumped to the highest since March 2020 but the 10-year Treasury yields remained lackluster around 1.48%, recently down to 1.477%.

Furthermore, Gold (XAU/USD) crossed the $1,814 hurdle to refresh the monthly top but posted the heaviest daily losses in a week, recently pressured around $1,805.

Read: Gold Price Forecast: Further XAU/USD declines await $1,805 break as yields dwindle

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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