Via Money Supply at the Financial Times:
Record low in US inflation expectations, by Robin Harding: The latest Cleveland Fed estimates of inflation expectations are out:
Expected inflation over every time horizon longer than six years is now at its record low in the period since 1982 that the series covers. Expected inflation over the next ten years is now down to 1.5 per cent.
The Cleveland Fed index is not the last word on inflation expectations but it is certainly reason to think that those QE2 = hyperinflation fears are somewhat misplaced…
I doubt the invisible inflation vigilantes will change their tune, but it's hard to find evidence of inflation worries in the data. If anything, markets are reassessing the Fed's ability to stop disinflation.