Question: Are long-term inflation expectations well anchored? Using monthly data since 2003, plot a measure of long-term inflation expectations based on the difference between the yields

Are long-term inflation expectations €œwell anchored?€ Using monthly data since 2003, plot a measure of long-term inflation expectations based on the difference between the yields on a five-year Treasury bond (FRED code: GS5) and a five-year Treasury Inflation Protected Securities (TIPS) bond (FRED code: FII5). What do you conclude? How did the financial crisis of 2007-2009 affect the measure?

GS5-FIIS 2 -1 2 2003 2007 2009 2011 2013 2015 FRED Shaded areas indicate US recessions 2013 research.stlouisfed.org

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