Everything that needs to be said has already been said.
But since no one was listening, everything must be said again.

Andre Gide

Friday, March 21, 2014

Inflation expectations and real treasury yields

My colleague Kevin Kliesen supplies me with the following updates on inflation expectations and real treasury yields.

The first two plots show not very much action since the beginning of the year. The latest data show a recent tick down in inflation expectations, and a tick up in real yields:

Here is what the data looks like since 2007. Following some volatile behavior during the crisis, inflation expectations have roughly remained stable since 2009.

The interesting behavior since that time was fall yields and a flattening of the yield curve (nominal and real).  That downward trend appears to have reversed in mid 2013 (the taper tantrum), but has more or less remained stable since then (with the exception of the 2-year real, which has declined somewhat).

So while the real yield curve has steepened as of late, real yields are still well below where they were before the crisis (especially at the short end).


  1. I was thinking about similar issues lately. Here is my post:


  2. April 2014 BLS food demand price index has been up every month this year. I believe that constitutes a trend.