Treasury Inflation-Indexed Securities
Today’s monetary policy decisions focus on future inflation prospects. Treasury inflation-indexed securities (TIIS) give us market measures of real interest rates with maturities of five, 10, and 30 years. Subtracting these rates from nominal Treasury bills of the same maturity provides marketbased measures of expected inflation over that period. These measures suggest that inflation is expected to drift up over time, averaging nearly 2.6 percent over the next five and 10 years. What may be more troubling is that this measure has increased 0.9 percentage point during the past year.
Suggested citation: "Treasury Inflation-Indexed Securities." Federal Reserve Bank of Cleveland, Economic Trends, no. 04-06, p. 6-7, 06.01.2004.