US inflation expectations refresh record top as traders brace for Fed

US inflation expectations, as per the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, renewed the all-time high to 2.94% by the end of Friday’s North American trading session.

In doing so, the inflation gauge rose for the second consecutive day while rising more than the Fed’s target rate ahead of this week’s key monetary policy decision.

It’s worth noting that the inflation fears could propel the Fed towards a 0.50% rate-hike. CME’s FedWatch Tool also justifies the market’s hawkish expectations by mentioning around 95.0% probabilities backing the said decision.

While the Fed-linked caution may challenge the market’s short-term moves, recently positive headlines concerning Ukraine may help traders to consolidate the previous losses.

Read: The week ahead: Fed and BoE rate decisions, UK wages, Cineworld and Deliveroo