At Any Rate Global Rates: Monthly Inflation Outlook
Jun 18, 2025
This discussion dives deep into global inflation trends, highlighting the modest dip in breakeven inflation rates in developed markets. Geopolitical events are examined for their impact on oil prices and U.S. inflation forecasts. The euro area is analyzed, revealing a decline in both headline and core inflation, driven by energy costs. Meanwhile, the dynamics of UK inflation show unexpected CPI rises amid falling retail prices. The experts share insights on labor market conditions and future core inflation expectations.
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US Inflation Near-Term Outlook
- US inflation may accelerate in the near term due to expected tariff pass-through and geopolitical risks.
- Front-end TIPS breakevens have room to outperform despite recent price rises and FOMC volatility.
Eurozone Inflation Moderation
- Euro area inflation is moderating with both headline and core inflation trending lower.
- Despite rising energy costs, European breakevens show limited acceleration, favoring a bearish view.
Strategic European Inflation Hedging
- Consider expressing a bearish stance on European inflation breakevens with lower beta exposure.
- Use strategies like steepening the HICP curve in sub-tenure sectors instead of outright underweight positions.