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The US 10-year breakeven inflation rate, which represents how the market foresees long-term price pressures, rose to 2.10% on Tuesday to hit the highest level since Oct. 22, 2018, according to St. Louis Federal Reserve.

The breakeven rate has risen by over 50 basis points in the past three months, with investors expecting generous fiscal spending under incoming US President Joe Biden. 

The President-elect unveiled a stimulus package worth $1.9 trillion last week. Meanwhile, Treasury nominee Janet L. Yellen argued Tuesday that it’s “critically important to act now” to pass more economic relief while defending Biden’s $1.9 trillion stimulus plan. 

Rising inflation expectations could bode well for scarce assets such as gold and lift treasury yields, putting a bid under the US dollar.