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Money and Financial Markets

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In recent months, yields on 10-year Treasury inflation-protected securities (TIPS) have fallen more than yields on nominal 10-year Treasury notes. The spread between the yields on these two securities, which is one measure of inflation expectations, suggests that expected inflation has risen moderately. Presumably, if the declining TIPS yield reflected only weaker economic fundamentals, the nominal rate would decline by an equal amount.

Suggested citation: "Money and Financial Markets," Federal Reserve Bank of Cleveland, Economic Trends, no. 04-12, pp. 06-07, 12.01.2004.

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