FED: US TSY 17W BILL AUCTION: HIGH 4.240%(ALLOT 92.41%)

The NY Fed's Survey of Consumer Expectations showed a notable pickup in short-term inflation expectations in March - but importantly, also offered evidence that longer-term expectations remained well-anchored.

• The 1-year median expectation of 3.26% was above analysts' consensus (3.26%), marking an 18-month high and a sharp rise from 3.13% prior. But the 3Y of 3.0% was unchanged from prior and basically steady for 4 consecutive months, and the 5Y median actually ticked lower to 2.9% from 3.0% prior.
• The latter two will be very closely eyed by the Fed as it weighs whether longer-run inflation expectations are becoming de-anchored amid the ongoing tariff shock, and the answer so far is "no".
• While some FOMC members have expressed concern at the longer-run UMichigan survey numbers (4.4% in April was the highest since the early 1990s), Chair Powell has recently expressed skepticism of that metric. The NY Fed survey is seen as having a more robust methodology and we would expect the Fed to take greater signal from it.
• Another notable finding in the survey was that there is no apparent increase in consumers' inflation uncertainty despite tariffs: "Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—decreased at one- and five-year-ahead horizons and was unchanged at the three-year-ahead horizon."

The youth wing of the centre-left Social Democrats (SPD), known as Jusos, has announced its opposition to the coalition agreement that, if approved, would result in a 'grand coalition' (GroKo) between the SPD, the centre-right Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU) coming to office. Jusos leader Philipp Tuermer said earlier on 14 April that "Our vote is rejection. Significant improvements would be needed for the Jusos to approve it,". Taggespiegel reports Tuermer "criticized the agreement for taking the wrong approach in migration policy, as well as in labor and social affairs. He called the agreed-upon financing reservation "a ticking time bomb."

• However, in what will prove a relief for party bosses, Jusos is not set to launch a 'no GroKo' campaign like that seen after the 2017 federal election (the campaign was ultimately unsuccessful with Angela Merkel re-elected for a third term).
• SPD General Secretary Matthias Miersch said in an interview The members' vote is, of course, a free decision. But: Anyone considering a no vote should also honestly weigh the consequences." Pro-agreement SPD figures have argued that the instability of the global political and economic system at present requires compromises in taking the junior coalition role.
• The ~358k SPD members' vote on the coalition agreement gets underway at 0800CET on 15 April. Voting takes place over the next two weeks, with the contest ending at 2359CET on 29 April. 

• US TSY 13W AUCTION: NON-COMP BIDS $2.372 BLN FROM $76.000 BLN TOTAL