US inflation expectations seesaw near weekly top with eyes on CPI data

US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, add to the market’s anxiety over the US inflation data ahead of key Consumer Price Index (CPI) figures for January.

Read: US Inflation Preview: Core CPI above 6% could spark next dollar rally

The inflation precursor grind higher past the three-month low marked in late January, with the latest moves mostly steady around 2.42%.

It should be noted, however, that the White House (WH) earlier signaled an increase in the YoY figures before WH Adviser Brian Deese said that he sees reason to think that factors boosting inflation will moderate over time.

Amid these plays, US Treasury yields ease from the highest in 2.5 years while Wall Street remains firmer amid the upbeat performance of technology shares and earnings.

That said, the market’s reflation fear is the main driver of late and any surprise reduction in the headlines US CPI for January, expected 7.3% YoY versus 7.0% prior, may add to the latest risk-on mood.