Long-term interest rates and inflation
By looking at long-term rates you could get a picture of future inflation. This is because long-term rates to some extent reflects the level of inflation expectations. The reason behind it works in this way is because investors want to invest at an interest rate that is sufficiently high to provide an acceptable level of real interest (realränta). By looking at bonds, one can get an idea of what investors require for interest and thus to compensate for inflation. Another way is to look at the yield curve. If short-term rates are unchanged, while long-term rates rising, it means that the yield curve is positively sloped. This means that inflation will be higher in the future because investors demand more compensation to cover future inflation increments.
