Longer-term deflation probabilities rise slightly

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 14 percent on August 11, up slightly from 12 percent a week earlier. An alternative lower bound on the probability of deflation ticked up to about 1 percent.

Categories: deflation