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 2023.

Latest update: Deflation Probabilities Unchanged — June 14, 2019

The 2019–24 deflation probability was 3 percent on June 13, unchanged from June 7. The 2018–23 deflation probability has remained at 0 percent through June 13 after falling from 5 percent to 0 percent on February 13 following the release of the Consumer Price Index (CPI) from the U.S. Bureau of Labor Statistics and the incorporation of revised seasonal adjustment factors for the CPI. These deflation probabilities, measuring the likelihoods of net declines in the Consumer Price Index over the five-year periods starting in early 2018 and early 2019, are estimated from prices of the five-year Treasury Inflation-Protected Securities (TIPS) issued in April 2018 and April 2019 and the 10-year TIPS issued in July 2013 and July 2014.