US inflation expectations refresh monthly low around 2.60%

US inflation expectations, as per the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, dropped for the second consecutive day by the end of Thursday’s North American session. That said, the inflation gauge dropped to 2.58% at the latest.

Despite the recent pullback in the inflation expectations, the latest Fedspeak continues to highlight fears of high price pressure inside the world’s biggest economy. Among them were Minneapolis Fed President Niel Kashkari, US Treasury Secretary Janet Yellen and Cleveland Federal Reserve Bank President Loretta Mester.

Hence, the market’s disbelief over inflation expectations seems to weigh on the risk appetite, which in turn keeps the sentiment heavy ahead of the key Testimony from Fed Chair Jerome Powell.

It’s worth noting that Fed’s Powell will have a tough task justifying the latest 0.75% rate hike while also uttering the recession woes at the minimum.

For Monday, a Juneteenth holiday in the US will restrict the market performance but the growth fears and chatters surrounding hawkish Fed bets may keep the risk-off mood alive.

Also read: S&P 500 Futures stay pressured amid recession, Fed concerns on Juneteenth holiday