Chart of the Week 05 September 2014
Many believe that inflation is permanent but that is not the case. In recent years inflation has hit some very low levels. The chart discussed this week was prepared a little less than a year ago; data today is changed to 1.69% yield on the 5-year treasury note and the official CPI inflation rate is up to 2%. Instead of the real yield of 0.31% in the video, right now the real yield is negative (-0.31%), implying an expectation for lower inflation than we have had the past several months. Inflation is variable and can be very low or even negative (deflation). This week I discuss when and how the current inflation outlook might change in the future.
Inflation is discussed in the video following the Read more >> jump.