April 21, 2011
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 increased slightly from 7 percent on April 13 to 11 percent on April 20. This is the highest reading since January. An alternative lower bound on this deflation probability inched up from 0 percent on April 13 to 1 percent on April 20.
Categories: deflation, expectations