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Chart of the Day: Inflation Expectations
by Felix Salmon
Feb 01, 2008
Feb 01, 2008
Greg Ip passes along this chart of long-term inflation expectations, which are now hitting new highs. The chart shows something called the "5yr-5yr forward breakeven" - what the market expects inflation to average over the five years from 2013 to 2018, which is as good a proxy for long-term inflation expectations as anything.
Clearly this is great for anybody with a curve steepener on, and it's bad for the long-term credibility of the Federal Reserve. But Ip implies that there might be technical reasons for the spike:
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