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U.S. 10-year inflation breakeven rate rises near 2 percent

Published 09/10/2014, 16:20
U.S. 10-year inflation breakeven rate rises near 2 percent

NEW YORK (Reuters) - A measure of traders' long-term U.S. inflation expectations rose early Thursday as perceived dovish minutes from the Federal Reserve's September policy meeting rekindled bets the Fed would cling to a policy stance to stimulate inflation.

The 10-year inflation breakeven rate or the yield premium on regular 10-year Treasury notes over 10-year Treasury Inflation-Protected Securities rose near 2 percent after hitting its lowest levels since late 2011 in recent days.

Some Fed policymakers have raised concerns that domestic price growth has remained sluggish during the current recovery, falling short of its 2 percent goal for core inflation.

Minutes on the Federal Open Market Committee's Sept 16-17 meeting, released on Wednesday, suggested concerns about the impact of a strengthening U.S. dollar and weakening economic prospects in Europe and Asia on the domestic economy, which traders reckon might delay when the Fed raises interest rates.

The 10-year TIPS breakeven rate was last at 1.99 percent, up more than 3 basis points on the day after quoted as high as 2.02 percent earlier Thursday, according to Tradeweb.

The 10-year breakeven rate slipped to a low of 1.91 percent early Wednesday prior to the release of the September FOMC minutes, Tradeweb data showed.

(Reporting by Richard Leong; Editing by Chizu Nomiyama)

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