Inflation expectations also often move together with crude oil prices. One measure of inflation expectations is the percentage difference between yields for five-year Treasury Inflation-Protected Securities (TIPS) and U.S. treasury bonds. This spread indicates expectations for what the inflation rate will be in five years. Inflation expectations peaked in March at 3.6%, decreasing in recent months in part due to:
Inflation, as measured by the U.S. Consumer Price Index, has flattened and slightly decreased recently, in part because energy-sector inflation has slowed down as oil prices have dropped; and
Expectations for future economic activity, have also fallen.
Although the price of Brent crude oil continued to increase from April to June when inflation expectations were decreasing, persistent concerns about economic conditions and petroleum demand have contributed to crude oil prices decreasing with inflation expectations from July through September
IT MAY DO IT
74
77
80
86
OTHER WISE
DROP
Inflation, as measured by the U.S. Consumer Price Index, has flattened and slightly decreased recently, in part because energy-sector inflation has slowed down as oil prices have dropped; and
Expectations for future economic activity, have also fallen.
Although the price of Brent crude oil continued to increase from April to June when inflation expectations were decreasing, persistent concerns about economic conditions and petroleum demand have contributed to crude oil prices decreasing with inflation expectations from July through September
IT MAY DO IT
74
77
80
86
OTHER WISE
DROP