Inflation May Be Worse Than Many Think
March 06, 2008
03:26 PM ET |
James Pethokoukis
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Inflation expectations for the next decade have risen from 2.23 percent to 2.48 percent today, at least as implied by 10-year treasury inflation-protected securities. Not too bad given what oil and the dollar are doing. But things may actually be far worse than that. The inflation watchers over at the Cleveland Fed perform a little mojo on those numbers to correct for certain biases. According to their calculations, 10-year TIPs are really forecasting inflation of 3.4 percent, up from 2.5 percent last August. That would be way outside the Fed's comfort range of 1 to 2 percent.
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May 05, 2008 12:29:22 PM [permalink] [report comment]