Daily Archives: September 30, 2010

GUESSTIMATING FUTURE INFLATION

The Federal Reserve has been trying to juice inflation higher for some time, and it appears that it’s had slight if precarious success over the past month. The market, at least, is pricing in slightly higher inflation for the decade ahead, based on the yield spread between the nominal and inflation-indexed 10-year Treasuries. As of yesterday, this inflation forecast was 1.78%, up a bit from 1.52% at the close of August, when worries of deflation were raging.

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