Expected (Implied) Inflation Chart
This chart shows the level of future Inflation expected by investors, in relation to the S&P 500. This number is derived by subtracting the 10 year Treasury Inflation-Protected Securities (TIPS) rate from the 10 Year Treasury Note rate. Because these are heavily-traded securities in an open market, this implies that investors are discounting the TIPS (relative to the 10-yr treasury) by the inflation rate expected over the next ten years. This is the implied anticipated Inflation rate expected by the market, going forward, over the next ten years. Lower Expected Inflation generally indicates bearish sentiment, and can be useful in stock market timing.
( HINT: Click-and-drag left-to-right on the top chart (S&P 500) to zoom in to a specific date range. Double-click on S&P 500 chart to zoom back out. )