Whatever happened to inflation targeting?
The Cleveland Fed calls this measure "a good estimate of the market's estimate of future inflation." It is derived from the 10-year yields on nominal and real bonds. The recent increase to 3.4 percent should have monetary policymakers worried.
Update on Sunday morning: Unfortunately, the link above no longer delivers what it is supposed to, I trust only temporarily. Whenever I try to access the Cleveland Fed's "inflation central" features, I am told the system "has experienced an unexpected error."
The irony: That is precisely what some market participants are starting to worry about. I hope the problem is fixed soon.