Tags: Inflation | economy | us | high

Investors See Inflation in U.S. at 3-Year High, JPMorgan Survey

Friday, 06 April 2012 11:37 AM

Financial market participants’ inflation expectations for the U.S. rose to the highest level in nearly three years, while they see deflation risk in the euro region, according to a survey by JPMorgan Chase & Co.

Inflation expectations in the U.S. for the next 12 months rose to 2 percent, the highest since JPMorgan began the survey in July 2009, the bank said. The same gauge for the U.K. fell to 2.2 percent from 2.3 percent in the previous survey in November.

Investors expect core inflation, which excludes volatile items such as food and energy, in the euro region to be at 1.68 percent in the next 12 months in the latest survey, compared with the average over previous surveys of 1.4 percent. They said the impact of the European Central Bank’s long-term loans on price growth will be “modest,” according to the bank.

Investors attached the highest probability in the euro area for deflation, or falling prices, over the next two to five years, according to the survey published yesterday.

The respondents sees 15 percent odds that the inflation rate in the euro region will fall below zero, matching a record high in the previous poll in November. The chances for deflation in the U.S. have fallen to 5 percent from 10 percent, while in the U.K. the probability remained unchanged at 5 percent, according to the bank.

JPMorgan said the survey was responded to by more than 375 investors globally.

© Copyright 2021 Bloomberg News. All rights reserved.

Friday, 06 April 2012 11:37 AM
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