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Inflation Project

Deflation Probabilities

Using estimates derived from Treasury Inflation-Protected Securities (TIPS) markets, described in a technical appendix, this weekly report provides two measures of the probability of consumer price index (CPI) deflation through 2018.

 Deflation Probabilities Remain at Zero
July 17, 2014

The 2013–18 deflation probability—based on the 5-year TIPS issued in April and the 10-year TIPS issued in July 2008—was 0 percent on July 16, where it has been since early September. The 2012–17 deflation probability is also 0 percent as of July 16.

Prices of Treasury Inflation-Protected Securities (TIPS) with similar maturity dates can be used to measure probabilities of a net decline in the consumer price index over the five-year period starting in early 2013 or the five-year period starting in early 2012.

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