Journal Article

TIPS and the risk of deflation


Abstract: The low level of inflation and the sluggish pace of economic recovery have raised concerns about sustained deflation?an inflation rate below zero with a general fall in prices. However, the relative prices of inflation-indexed and non-indexed Treasury bonds, which historically have proven to be good measures of inflation expectations, suggest that financial market participants consider the probability of deflation to be low.

Keywords: Deflation (Finance); Inflation (Finance); Treasury bonds;

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Bibliographic Information

Provider: Federal Reserve Bank of San Francisco

Part of Series: FRBSF Economic Letter

Publication Date: 2010

Order Number: 32