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With inflation expectations at multi-year highs, the US appears to be leading the so-called global reflation trade, which involves betting on price growth stimulated by fiscal or monetary policy. 

The 5-Year, 5-Year forward inflation expectation rate rose to a three-year high of 2.4% on Thursday. The 10-year breakeven inflation rate also jumped to the highest since the first half of 2017. 

Long-term expectations for price pressures have risen sharply in the past few weeks, with investors anticipating large fiscal spending under Joe Biden’s Presidency. 

While the US inflation expectations metrics have risen to the highest in three years, their Eurozone counterparts are yet to challenge highs seen in early 2020, as noted by market analysts. 

Clearly, low inflation is not so much of an issue for the Federal Reserve, and the US dollar will likely draw bids if the Treasury yields track inflation expectations higher.