Inflation Expectations

Cleveland Fed Estimates of Inflation Expectations

News Release: September 17, 2014

The Federal Reserve Bank of Cleveland reports that its latest estimate of 10-year expected inflation is 1.89 percent. In other words, the public currently expects the inflation rate to be less than 2 percent on average over the next decade.

The Cleveland Fed’s estimate of inflation expectations is based on a model that combines information from a number of sources to address the shortcomings of other, commonly used measures, such as the "break-even" rate derived from Treasury inflation protected securities (TIPS) or survey-based estimates. The Cleveland Fed model can produce estimates for many time horizons, and it isolates not only inflation expectations, but several other interesting variables, such as the real interest rate and the inflation risk premium. For more details, see the links in the box at right.

Estimates are updated once a month, on the release date of the CPI.The methodology used to generate the estimates was changed slightly starting June 15, 2011, and it is documented in this working paper.

Latest Estimates

(Click on the image to enlarge.)

(Click on the image to enlarge.)

(Click on the image to enlarge.)