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2007, No. 3
Posted 2007-02-01

Expected Inflation Near and Far

The author evaluates the 5-years TIPS spread and energy prices from January 2004 to November 2006. The relative stability of measures of expected inflation over longer horizons indicates that market participants view the impact of fluctuations in oil prices on inflation as largely transitory. Apparently, the public has remained convinced that the Federal Reserve is committed to keeping inflation low.