New York  London  GMT  Tokyo  Singapore 
Mark Perry

Expected US Inflation At A Six-Year Low (Unadjusted)

By Mark Perry on October 6, 2008 | More Posts By Mark Perry | Author's Website

10-year TIPS-derived expected inflation

The charts above show the market-based 10-year TIPS-derived expected inflation from the Cleveland Fed (both unadjusted - top two charts, and adjusted - bottom chart), calcualted from the difference between 10-year nominal treasury notes and 10-year treasury inflation-protected securities. On an unadjusted basis, inflation expectations fell to a six-year low of 1.47% last week, falling below 1.5% for the first time since September of 2002 (see top chart above).

After adjusting for an inflation-risk premium and a liquidity premium (see details here), the Cleveland Fed’s adjusted measure (2.45%) shows that expected inflation is the lowest since early November 2007 (see bottom chart above).

MP: As Frederic Mishkin wrote several weeks ago in the WSJ, “Don’t worry about inflation.” We might have many other economic concerns right now, but I think it’s time to take inflation off the list of economic variables to worry about.

If you like this article please...
Subscribe by RSS Subscribe by Email Email This Post To A Friend Email This Post To A Friend

Leave A Comment :

Name (required)
E-mail (required - never shown publicly)
URI
Subscribe to comments via email
Your Comment (smaller size | larger size)
You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.
Opinions From Our Contributors
Commodities Financials Exchange Traded Funds
Stocks Forex Economy



UPCOMING EVENTS
In 5 mins: JPY BOJ Deputy Governor Hirohide Yamaguchi to Speak in Tokyo
In 3 hrs: EUR German IFO - Expectations (NOV)
In 4 hrs: JPY Bank of Japan Monthly Report
In 6 hrs: EUR German Exports (3Q F)
In 6 hrs: EUR German Imports (3Q F)
Enter Your Email Address
Theme By: WordPress Theme Shop