Fed Reaffirms 2% Inflation Goal, Vows Forceful Action to Anchor Price Expectations 
China Home Prices Fall Again in June Despite Slower Pace of Decline 
European Regulators Clash With U.S. Treasury Over Private Credit Transparency 
South Korea’s KOSPI Enters Bear Market Despite Remaining 2026’s Best-Performing Major Stock Index 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Asian Stocks Slide as Oil Surge, U.S.-Iran Tensions and Fed Rate Bets Weigh on Markets 
Australia Consumer Sentiment Rises in July as Fuel Price Relief Lifts Confidence 
Japan Signals Surprise Yen Intervention Strategy as BOJ Hawkish Stance Puts FX Traders on Alert 
RBA Minutes Signal Australia Central Bank Remains Ready to Raise Interest Rates if Inflation Persists 
US Stock Futures Hold Steady as Soft Inflation Data Eases Fed Rate Hike Fears 
Supreme Court Backs Lisa Cook, Defends Federal Reserve Independence Against Trump Firing Attempt 
Yet another sign that some investors have started pricing reflation. We think FED is likely to reach its inflation target and this time around a bit more. Last week, 10 year treasury inflation protected securities returned 1.7%, best weekly return in years and that came in the back of FOMC policy announcement, for which rates were on hold but serious changes in projections.
Few weeks ahead of the meeting, FED’s vice chair Stanley Fischer said, initial stirrings of inflation visible.
Another measure, core inflation, which excludes volatile components, such as fuel and food already running higher than FED’s medium term target of 2%. In February, it rose by 2.3% y/y.
Breakeven rates, which compare yield in conventional bonds and inflation protected bonds are already running highest in months. 10 year break even rates now at critical point of 1.62%, a level not seen since December.
We expect further rise in inflation expectations towards 2% and buying of TIPS are highly recommended.
