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Expand chart
Data: Federal Reserve Bank of St. Louis; Chart: Axios Visuals

U.S. inflation expectations continue to rise, as the 5-year breakeven rate hit its highest in nearly eight years on Wednesday.

What's happening: Inflation expectations are climbing at a torrid pace thanks largely to massive lending by the Fed and big government stimulus programs, with both expected to continue at a sizable pace for some time.

  • The 10-year breakeven rate and 30-year breakeven rate, which measure expectations of inflation over those time periods, also rose to fresh highs.

ICYMI: The University of Michigan's January consumer sentiment index fell to 79.0, down from its average of 81.5 in 2020, and well below the average of 97.0 from 2017 to 2019.

  • However, one-year-ahead inflation expectations ticked up to 3% from 2.5% in December, while 5- and 10-year inflation expectations rose to 2.7%.

Flashback: "Right now everybody thinks we’re going to get reflation — that’s real growth going forward," Jim Bianco, president of Bianco Research, said on the latest Voices of Wall Street podcast last month.

  • "If that morphs itself into inflation that could be [a problem] for financial markets throughout the second half of the year."
  • "If we get to 2.6% or 2.7% on the core [inflation] number that’s the highest level we would have in 30 years," Bianco noted.

Go deeper

Ina Fried, author of Login
Feb 3, 2021 - Economy & Business

Charted: How Google Cloud stacks up to AWS

Data: Company filings; Chart: Andrew Witherspoon/Axios

Google has been spending heavily to win business away from Amazon Web Services, as evidenced by both companies' latest quarterly results, which were announced Tuesday.

The big picture: Google may be the leader in search, but when it comes to cloud services, it is still chasing after Amazon and Microsoft's Azure.

Mike Allen, author of AM
3 hours ago - Politics & Policy

Biden adviser Cedric Richmond sees first-term progress on reparations

Illustration: "Axios on HBO"

White House senior adviser Cedric Richmond told "Axios on HBO" that it's "doable" for President Biden to make first-term progress on breaking down barriers for people of color, while Congress studies reparations for slavery.

Why it matters: Biden said on the campaign trail that he supports creation of a commission to study and develop proposals for reparations — direct payments for African-Americans.

Cyber CEO: Next war will hit regular Americans online

Any future real-world conflict between the United States and an adversary like China or Russia will have direct impacts on regular Americans because of the risk of cyber attack, Kevin Mandia, CEO of cybersecurity company FireEye, tells "Axios on HBO."

What they're saying: "The next conflict where the gloves come off in cyber, the American citizen will be dragged into it, whether they want to be or not. Period."