Through my course of CFA studies one of the most important things that I learnt is the impact of inflation and how people structure their businesses to be unaffected by it.

Why is inflation a bad thing?
Unanticiated Inflation more than inflation is a bad thing. It makes short term real interest rates go down and long term nominal interest rates go up. Inqualitative terms, it makes it difficult to assess how well your business did in actuallity and also messes up the goals and estimates set by business for their appraisal, and hence refinancing. It makes the investment climate less friendly in that place and of course increases employee dissatisfaction. Also wages being sticky take time to go up and then take time to come back down. This is in conformation to the Keynesian thought.

In the last one year inflation in teh US has averaged at 4%. That is pretty high by US standarads and the new Fed Chief Bernanke has targeted inflation at 2%. Right now the yield discount of the 10-year TIPS to 10-yr bond is 2.5 % which implies  a certain buy TIPS and sell BOND trade. Since it is certain that the present aggregate demand in the economy will keep inflation (CPI) above 3 % for at least a year in average.

The following website is about inflation data that is relevant and official about treasury inflation protected securities.
http://www.publicdebt.treas.gov/of/ofcpi032006pr.htm