Inflation expectations soared in the preliminary UMichigan survey for May, with the 1-year measure up to 7.3% from 6.5% prior, and long-run up to 4.6% from 4.4% prior. Those were respectively the highest since 1981 and 1991 and well above consensus expectations that those measures would remain steady (at 6.5% / 4.4%).
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There were mixed developments in the ECB’s underlying inflation metrics in March, with model-based indices softening on an annual basis but trimmed mean/weighted median series a little sticker.
There had been some speculation the BoC could change its estimates for neutral rates at this meeting (they typically re-examine it every April), with some analysts seeing risks they would up the range by 25bp and others seeing it lowered by 25bp. Instead, the BoC left it steady at 2.25-3.25%, meaning that the current overnight rate remains exactly in the middle of the range (see section in MPR)