U.S. Inflation Outlook Slumps to Six-Year Low as Fed Sees Pickup
- Five-year break-even rate falls below 1% to lowest since 2009
- San Francisco Fed's Williams sticks to call for 2% inflation
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The Treasury market is signaling inflation expectations in the U.S. are tumbling, even as Federal Reserve officials stick to forecasts for a pickup.
The difference between yields on five-year notes and similar-maturity Treasury Inflation Protected Securities, a gauge of expectations for consumer prices, fell below 1 percentage point Tuesday. The so-called break-even rate is the lowest in six years, after dropping the most in more than eight months on Monday.