Inflation Expectations Are Stable, Says Apollo's Slok

• Headline inflation is high due to food and energy, but long-term inflation expectations remain stable and well-anchored.
• Consumer sentiment is declining across all income levels, yet actual consumer spending (air travel, retail sales, hotel demand) remains robust.
• The US labor market is characterized by 'low higher, low fire,' with the upcoming jobs report being critical for Fed policy decisions.
• A record $14 trillion in US government and corporate debt is maturing or being issued in the next year, creating significant supply that will likely put upward pressure on rates and credit spreads.

Apollo Chief Economist Torsten Slok discusses stable long-term inflation expectations despite high headline inflation driven by energy and food. He notes a divergence between declining consumer sentiment and strong actual spending. The upcoming US jobs report is critical for the Fed's dual mandate, as a record $14 trillion in US government and corporate debt is set to mature or be issued in the next year, putting upward pressure on rates and credit spreads.