The monthly inflation data are seen by the market as a leading indicator of the Fed's movements, so the US October CPI data released tonight attracted global attention. But in fact, another inflation data to be released on Friday may be more important to the market outlook.

Although the expected decline in CPI data for October may make investors more fond of it.However, the 5-10-year inflation forecast released by the University of Michigan on FridayOr it will really resonate with Fed officials.

The inflation expectations rebounded to 2.9 per cent in October, and further upward in November could put more pressure on the Fed to accelerate tightening and raise benchmark interest rates to higher-than-expected levels, adding to the burden on financial assets such as stocks and bonds.

Fed officials may be able to accept higher short-term inflation expectations, but in theory, rising long-term inflation expectations suggest that the public is losing confidence, which is more important for the Fed.

The findings from the University of Michigan may further strengthen the Fed's decision after Federal Reserve Chairman Powell reiterated his hope that the Fed will not make the mistake of withdrawing from austerity too early.

According to the media, Prashant Newnaha, senior Asia-Pacific interest rate strategist at TD Securities, said recentlyIf CPI meets expectations in October and 5-10 year inflation expectations at the University of Michigan rise to their highest level since 2011, Treasury yields could rise further.

Newnaha believes that:

If the October CPI data meets expectations, it may not trigger a huge market reaction, but if the University of Michigan data return to the highs of January and June this year,It may prove once again that the rate hikes so far this year have not had the desired effect in curbing inflation.

Morgan Stanley said in a recent research report that the University of Michigan survey of long-term inflation expectations basically followed the five-year moving average of CPI, which has been rising recently, so the number of inflation warnings issued by the survey continues to increase.

According to the media, according to research by Michael Weber and others at the Booth School of Business at the University of Chicago, the 5-10-year inflation expectations surveyed by the University of Michigan are valued because designers use "clever thinking" when designing survey questions. for example, they usually ask respondents about "price" rather than "inflation" to avoid unnecessary confusion.

The study found that the public does not quite understand the concept of inflation, and respondents tend to assess prices based on a number of goods they are often exposed to, including food and gasoline. For example, for male respondents, the price of beer is often one of their considerations.