5-Year Breakeven Inflation Rate
Monthly
T5YIEM • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
2.44
Year-over-Year Change
11.93%
Date Range
1/1/2003 - 7/1/2025
Summary
The T5YIEM represents the 5-Year, 5-Year Forward Inflation Expectation Rate, a critical market-based measure of long-term inflation expectations. This metric provides insights into how investors and market participants anticipate future inflation trends over a 5-year forward period.
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
Economists and financial analysts use this forward-looking indicator to gauge market sentiment about future inflation expectations beyond the immediate economic horizon. The rate reflects the market's collective assessment of potential inflationary pressures and monetary policy effectiveness.
Methodology
The T5YIEM is calculated using the difference between nominal Treasury yields and inflation-protected Treasury securities, adjusted to capture long-term inflation expectations.
Historical Context
Central banks like the Federal Reserve closely monitor this metric to inform monetary policy decisions and assess the credibility of inflation targeting strategies.
Key Facts
- Measures market-based long-term inflation expectations
- Calculated using Treasury yield differentials
- Important indicator for monetary policy decision-making
FAQs
Q: What does the T5YIEM actually measure?
A: The T5YIEM measures the market's expected inflation rate 5 years into the future, derived from Treasury securities pricing.
Q: Why do investors care about this metric?
A: Investors use this metric to understand potential future inflation trends and make informed investment decisions about long-term financial strategies.
Q: How is the T5YIEM calculated?
A: It is calculated by comparing nominal Treasury yields with inflation-protected Treasury securities to extract market-implied inflation expectations.
Q: How do central banks use this information?
A: Central banks analyze this metric to assess market perceptions of future inflation and potentially adjust monetary policy accordingly.
Q: How frequently is this data updated?
A: The T5YIEM is typically updated monthly, providing a current snapshot of long-term inflation expectations.
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Related Trends
30-year Breakeven Inflation Rate
T30YIEM
7-year Breakeven Inflation Rate
T7YIEM
5-Year, 5-Year Forward Inflation Expectation Rate
T5YIFR
10-Year Treasury Constant Maturity Minus 3-Month Treasury Constant Maturity
T10Y3M
Moody's Seasoned Baa Corporate Bond Minus Federal Funds Rate
BAAFF
Moody's Seasoned Baa Corporate Bond Yield Relative to Yield on 10-Year Treasury Constant Maturity
BAA10Y
Citation
U.S. Federal Reserve, Monthly [T5YIEM], retrieved from FRED.
Last Checked: 8/1/2025