Inflation expectations from the TIPS market have moved higher over the past week and remain on the higher end of readings seen during the last two years.
The Barclays 5-year/5-year forward breakeven inflation rate is currently at 2.89 percent, up about 9 basis points (bps) since February 27 and about 45 bps higher than the average daily rate seen between January and August 2012—when expectations consistently fluctuated between 2.3 percent and 2.6 percent.
(Note: The breakeven inflation rate is a measure of expected inflation derived from "nominal" Treasury securities and their "real" counterparts—inflation-protected TIPS securities.)
