Longer-term deflation probabilities edge up

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 November 9, up slightly from 16 percent a week ago. An alternative lower bound on the probability of deflation was 2 percent on November 9, also slightly higher than a week earlier.

Categories: deflation