Inflation Expectations: Less Worrying Than They Seem
Anonymous econoblogger knzn has done a great job of moving the inflation-expectations story forwards with a blog entry actually looking at where Greg Ip's numbers might be coming from. The reason for looking at inflation expectations between 2013 and 2018 is that they "strip out near-term inflation disturbances related to fluctuating energy and food prices". But that doesn't mean it isn't worth keep in eye on inflation expectations between now and 2013, if only for calibration purposes.
It turns out, after running the break-even inflation rate (BEI) numbers, that even as long-term inflation expectations seem to be rising, five-year inflation expectations are if anything coming down.
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