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Expected Inflation and the TIIS Market

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Ascertaining long-term inflation expectations is notoriously difficult. Survey measures are available but not necessarily reliable. When surveyed, households report that they expect inflation to register 3.1% over the next five to 10 years. But the Survey of Professional Forecasters indicates that they expect inflation to register only 2.5% over the next 10 years. Households’ inflation expectations, in fact, are consistently about 50 basis points (bp) higher than professional forecasters’.

Suggested citation: "Expected Inflation and the TIIS Market." Federal Reserve Bank of Cleveland, Economic Trends, no. 04-10, p. 7, 10.01.2004.

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