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The Inflation Project


April 14, 2011

Deflation probabilities in longer term stay low

Prices of Treasury Inflation-Protected Securities (TIPS) with similar maturity dates in 2015 can be used to measure probabilities of a net decline in the consumer price index over the five-year period starting in early 2010. One measure of this deflation probability was 7 percent on April 13; since late January it has fluctuated within a 5 to 10 percent band. An alternative lower bound on this deflation probability was 0 percent on April 13; since February 1 it has been 1 percent or lower.

Categories: deflation, expectations

 

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