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 17 percent on October 5, unchanged from its week-ago and month-ago values. An alternative lower bound on the probability of deflation was 1 percent on October 5, also unchanged from a week earlier.

Categories: deflation