1 In subsequent years, 5-, 20-, and 30-year notes were also introduced. 10-Year Breakeven Inflation Rate 0. 10-Year Breakeven Inflation Rate. 1. Term Structure of Expected Inflation Rates. 10 Year TIPS/Treasury Breakeven Rate is at 2.33%, compared to 2.33% the previous market day and 1.29% last year. Even with the recent rise from the March lows, TIPS breakeven rates remain below the 10-year average and are still at the low end of their 10-year trading range. Source: Bloomberg, using weekly data as of 7/31/2020. The breakeven inflation rate represents a measure of expected inflation derived from the 10-year and 5-year U.S. Treasuries, respectively. The 5y5y swap rate is a market measure of what five-year inflation expectations will be in five years’ time. Source: Bloomberg and the Bank of Israel. (The 5-year breakeven inflation rates are obtained from 5-year Treasury inflation-indexed constant maturity securities and are thought to represent the market’s expectation of CPI at a 5-year horizon.) The two-year break-even rate, which is derived from US inflation-protected government securities, now hovers at 2.7 per cent, while the five-year gauge recently hit 2.5 per cent. So, the market is forecasting that U.S. inflation will run at 2.43% over the next five years, the highest rate of market-predicted inflation since the 5-year breakeven rate hit 2.63% on July 7, 2008. The 10-year breakeven inflation rate, a market-based measure of inflation expectations, hit its highest level last Friday, February 5, since 2014. This inflation rate at which neither security is more attractive is known as the breakeven inflation rate. That was just before the housing market crash sent stock values plummeting. The latest value implies what market participants expect inflation to be in the next 30 years, on average. Stay on top of current and historical data relating to United States - 10-Year Breakeven Inflation Rate Bond Yield. We exploit the fact that a large number of commodities’ contracts are traded in financial markets. This matters not just to bond investors but stock investors too. The 40-year maturity has been chosen as the cut-off to maintain consistency along the yield curve. The usual way of describing this is to say that the "market is pricing in an average inflation rate of 1.88% over the next 10 years." 0. The Breakeven Inflation Rate rebounded strongly from the pandemic-induced low in March 2020. On the last day of our sample (3/12/2021), the ten‑year breakeven inflation stood at 2.37 percent, a level last seen in early 2014. Barchart.com Inc. is the leading provider of real-time or delayed intraday stock and commodities charts and quotes. In an earlier FRED Blog post, we highlighted the simultaneous decline in the 5-year breakeven inflation rate and the price of oil in 2014. Inflation protection is extremely cheap. TIPS 10 Year Breakeven Inflation Rate (USGGBE10 Index). FRED/T10YIE, 1W Short. Shortly after the latest CPI report, the 10-year inflation breakeven rate, or the yield gap between 10-year Treasury Inflation Protected Securities and regular 10-year Treasury notes, hit 2.05 percent, its highest level since March, Tradeweb and Reuters data showed. Source: Federal Reserve Board; authors’ calculations. U.S. 30-Year Breakeven Inflation Rate 2.3%, Highest Since 2014 - Bloomberg In particular, breakeven inflation rates have risen sharply across maturities starting in late March 2020 with this upward movement continuing to date. breakeven rate of inflation. This gives us the market’s expectation for future inflation over 5-year, 7-year, 10-year, 20-year, and 30-year horizons. 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