In his testimony to the JEC on April 27, 2006, Fed Chairman Bernanke stated: "The stability of core inflation is also enhanced by the fact that long-term inflation expectations--as measured by surveys and by comparing yields on nominal and indexed Treasury securities--appear to remain well-anchored." On April 27, the break-even spread between the yield on the Treasury 10-year note and the 10-year TIPS yield - a measure of investors' expectations about the 10-year CPI rate of inflation -- was 2.64%. On June 2, the break-even spread was 2.63%. For all intents and purposes, there had been no change in "long-term inflation expectations." Yes, those who respond to surveys but who don't place actual market bets have raised their inflation expectations. But are these expectations long term? Why the sudden change in tone of Fed rhetoric? I think Diane Swonk put her finger on it, so to speak, in her quotes in the June 7 edition of the Washington Post http://www.washingtonpost.com/wp-dyn/content/article/2006/06/06/AR2006060601324.html.