Global Rates: Monthly Inflation Outlook

Phoebe White, senior U.S. rate strategist and head of U.S. inflation strategy at Morgan, interviews European rate strategist Frida Infante to discuss their monthly inflation outlook. The discussion covers relatively unchanged breakevens across developed markets, August inflation data meeting expectations, and a divergence in headline and core inflation forecasts between the US and Euro area. Infante details the Euro area's inflation outlook, noting moderating wage pressures and a projected peak in inflation before a decline. She also addresses the minimal impact of recent French political developments on the French linker market. White then shares her more bullish view on U.S. inflation, citing recent data, a dovish shift in the Fed's reaction function, and concerns regarding threats to Fed independence as factors supporting wider TIPS breakevens. The conversation concludes with a summary of their perspectives and a look ahead to future discussions.