The government is currently considering the value of the social protection package that will be implemented in the next fiscal year, in light of
expected inflation rates. This will be completed and presented to parliament as part of the budget in March.
Inflation expectations are commonly gauged in two ways from
expected inflation rates implied in market interest rates and from surveys of economists or consumers.
On Thursday, Janet Yellen, chair of the US Federal Reserve, said that she expected interest rates in the US to be hiked before the end of this year, adding that she
expected inflation rates to rise to the 2 per cent target.
The eurozone is still facing major setbacks, including lower than
expected inflation rates, as well as a number of member countries not being able to comply with set deficit and debt rates.
If we assume purchasing power parity then differences in interest rates reflect differences in
expected inflation rates. Both the cash flows and the discount rate are affected by expected inflation; thus, a low discount rate arising from a low risk free rate will be exactly offset by a decline in expected nominal growth rates for cashflows and the value will remain unchanged.
On the bond market, which became turbulent after the introduction of new monetary easing steps on April 4, one member said that potential instability remained in the market, while another member said a rise in interest rates could indicate a pickup in
expected inflation rates and an underlying upturn in economic activity.
And looking at current and
expected inflation rates, there is simply no evidence that could substantiate fears about any deviation from price stability.
Analysts polled by Reuters in June
expected inflation rates in the Gulf to range from 1.7 percent for Qatar to 4.7 percent for Saudi Arabia this year.
ANKARA, Apr 20, 2010 (TUR) -- Turkey's Central Bank Governor Durmus Yilmaz said Tuesday that, it
expected inflation rates to fluctuate over target, for a while, only to enter a falling trend in Q4 of 2010.
We expect that more monetary aggregate, more government taxes, and/or higher
expected inflation rates would cause real depreciation of the U.S.
Treasury bond does not offer an attractive reward/risk dynamic, given current and
expected inflation rates.
This requires
expected inflation rates [i.sub.z] (for operating cash flows exclusive of replacement costs) and [i.sub.F] (for replacement costs); for illustrative purposes, we adopt estimates for each of these rates of .02, consistent with the estimate for i.
