According to a report by Jin Shi Data, Citigroup's senior interest rate strategist Benjamin Wiltshire stated that investors may have underestimated the resilience of American consumers, and there is still slight room for upward revision of market inflation expectations. He recommends buying 5y5y forward inflation contracts, stating that the current pricing level of about 2.5% is too low, while the core inflation indicator favored by the Federal Reserve remains stubbornly stable at just below 3%.
Wiltshire pointed out that last year's delays in the transmission of U.S. tariff policies had generally disappointed the market, and current traders are quite hesitant about pricing inflation risks. He believes that the momentum for pricing inflation premiums no longer exists, and structurally, inflation is clearly underestimated.