U.S. Inflation Outlook Hits Highest Since 2013

Inflation expectations in the United States jumped to an eight-year high as the latest economic data indicate a strong rebound going forward, according to Bloomberg.

• The 10-year breakeven rate, or where investors see annual inflation rates for the next decade, hit 2.4% on Tuesday. This is the first time the rate was seen since April 2013.
• Reflationists have been looking at the recent jump in home prices and consumer confidence, as well as the prospects of more stimulus.
• U.S. President Joe Biden is scheduled to pitch a social-spending package to Congress on Wednesday.
• An analyst said investors will continue to question inflation this year, as the U.S. household balance sheet is in its healthiest state in years.
• Another analyst noted that this may be transitory in nature, as lockdowns disrupt production capacity and push delays in supply chains.
• Meanwhile, an MSCI Inc. gauge of global value shares has barely moved this week and has been behind its more defensive growth counterpart by nearly 4 percentage points this month.