Longer-term deflation probabilities unchanged

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 2011. One measure of this deflation probability was 13 percent on June 8, unchanged (after rounding) from a week earlier. An alternative lower bound on the probability of deflation was 1 percent, also unchanged from a week earlier.

Categories: deflation