Material Detail

This case quantifies inflation expectations, as reflected in bond yields, over time. This activity can be used as either (a) an instructor-led example in which the instructor shows –either on paper or a screen– the data and students analyze them, or (b) as a student exploration in which students find the specified data. Instructors with less time could use option (a) and instructors interested in their students learning about the FRED database could use option (b).This activity plots the yield of a non-inflation-adjusted Treasury bond (e.g. the 30-Year Treasury Constant Maturity Rate), the yield of an inflation-adjusted Treasury bond (e.g. the 30-Year Treasury Inflation-Indexed Bond), and computes the difference between the two of them. This difference is an approximation of inflation expectations developed by financial markets and it displays both a secular trend and cyclical behavior.This activity is suitable for addressing each of the following issues:1. How do inflation expectations change over time?2. How did inflation expectations adjust after the 2008-2009 financial crisis?3. What is the relationship between monetary policy and inflation expectations?

This will delete the comment from the database. This operation is not reversible. Are you sure you want to do it?

Thank you for reporting a broken "Go to Material" link in MERLOT to help us maintain a collection of valuable learning materials.

If you feel this material is inappropriate for the MERLOT Collection, please click SEND REPORT, and the MERLOT Team will investigate. Thank you!

You are being taken to the material on another site. This will open a new window.

Do not show me this again