Today is going to be kind of a synthetic Sunday as we have a pretty empty day in terms of data releases. The only notable release could be the NYFed Inflaiton Expectations survey as it comes after the jump in inflation expectations in the University of Michigan survey.
The long term expectations remain pretty anchored but the short term expectations are rising fast. The culprit is the fear of tariffs. Below you can see how tariffs news triggered surges in expectations.
One thing the Fed is attentive to right now is whether the tariffs will change long term inflation expectations because today’s context is different from the one experienced in the first Trump’s administration.
Back then, we’ve had inflation around 2% for decades, but this time the highest inflation in over four decades is still fresh in everyone’s mind.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
