Given the following data, find the expected rate of inflation during the next year.

r* = real risk-free rate = 1.60%.

Maturity risk premium on 10-year T-bonds = 2%. It is zero on 1-year bonds, and a linear relationship exists.

Default risk premium on 10-year, A-rated bonds = 1.5%.

Liquidity premium = 0%.

Going interest rate on 1-year T-bonds = 4.40%.