20-year Breakeven Inflation Rate
T20YIEM • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
2.51
Year-over-Year Change
1.62%
Date Range
7/1/2004 - 7/1/2025
Summary
The 20-year Breakeven Inflation Rate represents market expectations for long-term inflation over the next two decades. This metric provides crucial insights into how investors and financial markets anticipate future price levels and economic conditions.
Analysis & Context
This economic indicator provides valuable insights into current market conditions and economic trends. The data is updated regularly by the Federal Reserve and represents one of the most reliable sources for economic analysis.
Understanding this metric helps economists, policymakers, and investors make informed decisions about economic conditions and future trends. The interactive chart above allows you to explore historical patterns and identify key trends over time.
About This Dataset
The breakeven inflation rate is calculated by comparing yields of Treasury Inflation-Protected Securities (TIPS) with nominal Treasury bonds of the same maturity. Economists and investors use this indicator to gauge market-based inflation expectations and potential economic trends.
Methodology
The rate is derived by subtracting the 20-year TIPS yield from the 20-year nominal Treasury bond yield, reflecting the market's implied inflation forecast.
Historical Context
Central banks and policymakers closely monitor this metric to understand long-term inflation expectations and potential monetary policy adjustments.
Key Facts
- Represents market-implied inflation expectations over 20 years
- Calculated using the difference between nominal and inflation-protected bond yields
- Provides insight into long-term economic outlook
FAQs
Q: What does the 20-year Breakeven Inflation Rate indicate?
A: It shows the market's expected average inflation rate over the next 20 years. A higher rate suggests expectations of increased future inflation.
Q: How do investors use this metric?
A: Investors use it to make informed decisions about long-term investments and hedge against potential inflation risks.
Q: How is the rate calculated?
A: It's calculated by subtracting the 20-year TIPS yield from the 20-year nominal Treasury bond yield.
Q: Why is this important for economic policy?
A: It helps central banks and policymakers understand market expectations and potentially adjust monetary policy accordingly.
Q: How often is this data updated?
A: The data is typically updated daily during market trading hours, reflecting current market conditions and expectations.
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Citation
U.S. Federal Reserve, 20-year Breakeven Inflation Rate [T20YIEM], retrieved from FRED.
Last Checked: 8/1/2025