Five Year Inflation Expectations, April 22

Menzie Chinn
By Menzie Chinn of Econbrowser
Professor of Public Affairs and Economics at the University of Wisconsin •

Five-year inflation expectations climbed to 2.61% in April, up from February's 2.4% level.

depositphotos_747514034-stock-photo-wood-block-percentage-change-arrow.jpg
Source: DepositPhotos

Inflation break-even as of today: 2.61%

Figure 1: 5-year Treasury-TIPS spread (blue), expected 5-year inflation from DKW (red), both in %. Source: Treasury via FRED, Fed.

2.61% compares with the 2.4% spread reported on 2/27.

For March, the NY Fed median 5-year-ahead inflation reading is 3.05%, U.Michigan at 3.2%,  compared to the average Treasury-TIPS break-even of 2.55%, and DKW average estimate of 2.64%.

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