Market expectations for inflation over the next five years as of today:
figure 1: 5-year inflation breakeven calculated using 5-year Treasury minus 5-year TIPS yield (blue), 5-year expected inflation rate (red). Source: Treasury via FRED, Kim, Walsh & Wei (2019) Follow D’amico, Kim, and Wei (DKW) on March 10, 2022, and the author’s calculations.
And next year’s inflation forecast based on surveys and mixed estimates:
figure 2: CPI YoY Inflation (black), Cleveland Fed approaching April 1 (grey+), median forecast from Professional Forecasters Survey (blue+), median forecast from Michigan Consumer Survey (preliminary) (red), NY Fed Consumer Expectations Survey Median (light green), Cleveland Fed Forecast (pink), Coibion-Gorodnichenko Corporate Expectations Survey Mean [light blue squares]. Source: BLS, University of Michigan via FRED and Investing.com, Reuters, Philadelphia Fed Survey of Professional Forecasters, New York Fed, Cleveland Fed and Kobe and Gorodnichenko.
