Tuesday, January 11, 2011

Blog assignment #2

1. Many people would be interested in inflation expectation such as consumers, financial forecasters, the government, banks and firms in the marketplace.

2. There are two main ways to calculate inflation expectation. One way is to look at Inflation-indexed government bonds, you take the TIPS yield- the Treasury yield and it gives you the expected inflation rate. Another way is to survey people on what they expect inflation to be.


FRED Graph

Graph from http://research.stlouisfed.org/fred2/series/MICH

Data summarized from http://baselinescenario.com/2009/04/08/inflation-expectations-for-beginners/

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