US 5-year inflation expected, 3.13%, record high-early rate hike observed at CPI-Bloomberg

US bond market inflation expectations rise as US consumer price index (CPI) rises year-on-year for the first time in 31 years since 1990, money market traders raise rates through federal reserves The expected start time has been advanced from September to July next year.

The break-even inflation rate (BEI), which shows the yield gap between US 5-year government bonds and inflation-indexed bonds (TIPS) and reflects inflation expectations over the next five years, temporarily rose by around 14 basis points (bp, 1bp = 0.01%). , Recorded a record high of about 3.13%.

Traders are increasingly aware of the risk that the significant pace of the US CPI’s rise will turn out to be more difficult than the Fed’s current forecasts.

In the US Treasury market, the pace of increase in short-term government bond yields has prevailed, and the yield gap (spread) between 2-year and 10-year bonds has narrowed to around 97bp.

David Petrosinelli, senior trader at InspereX, said, “There is growing recognition that the Federal Reserve is moving too slowly. Flattening the yield curve is a result of people’s belief that shorter interest rates will rise in the near future. I pointed out.

U.S. Treasury Yields Soar, 30-Year Bond Auctions Slump and U.S. CPI Exceeding Expectations

Original title:
Breakevens Surge as Traders Bet on Faster Fed Move After CPI (3)(抜粋)