On Thursday, the government will release its December report for inflation. But it looks like it’ll be a non-event because the crowd believes that consumer prices are no longer a threat.
One measure of the market’s comfort that prices are contained can be seen in inflation-indexed Treasuries, otherwise known as TIPS. The spread between the yields on standard 10-year and 10-year TIPS was a mere 2.28%, as of last Friday’s close. That’s near the lowest levels of recent years. The implication: the market’s not worried about future inflation and has become less worried of late.
