Longer-term deflation probabilities remain 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 15 percent on November 2, roughly the same level as a week ago. An alternative lower bound on the probability of deflation was 1 percent on November 2, also unchanged from a week earlier.

Categories: deflation