US long-term inflation expectations hit 7-month high

The US long-term inflation expectations, as represented by the 10-year breakeven rate, rose to 1.73% on Thursday. That’s the highest level since Jan. 24, according to data source St. Louis Federal Reserve. 

Inflation expectations have risen sharply from 0.5% to 1.73% in the past five months and could continue to tick higher in the near term as the Federal Reserve is now more willing to allow inflation to rise above 2% for some time before raising rates. 

Chairman Powell, while speaking at the annual Jackson Hole event on Thursday, announced the new inflation policy. 

“The new strategy tells us that the central bank has no desire to raise rates and has a skewed desire to print more,” Raoul Pal, Founder and CEO of Global Macro Investor and Real Vision Group tweeted a few minutes ago.