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Gregory Daco reports that short-term inflation expectations in the U.S. climbed in September to their highest level since May 2023, according to the New York Fed. The one-year-ahead inflation expectation reached 3.9%, up by 0.3 percentage points. In contrast, medium-term expectations remained steady, with the three-year-ahead expectation at 3.3%, up 0.1 points, and the five-year-ahead rate unchanged at 3.0%.
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Gregory Daco has recently discussed trends in long-term rates, noting the 10-year yield reached 4.85 percent, its highest since 2023, after a $6 billion U.S. Treasury buyback. Earlier, he appeared on Radio Davos to review the latest World Economic Forum Chief Economists Outlook. These reports add context to shifts in inflation expectations.