5-Year, 5-Year Forward Inflation Expectation Rate
T5YIFR • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
2.32
Year-over-Year Change
0.87%
Date Range
10/12/2021 - 8/8/2025
Summary
The 5-Year, 5-Year Forward Inflation Expectation Rate measures market participants' anticipated inflation rate five years from now, looking five years ahead. This metric is a critical indicator of long-term inflation expectations used by policymakers and financial analysts to assess economic stability.
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
This forward-looking inflation expectation metric represents the market's consensus on future price levels, derived from Treasury Inflation-Protected Securities (TIPS) and nominal Treasury bond yields. Economists interpret this rate as a key signal of inflation expectations that can influence monetary policy decisions.
Methodology
The rate is calculated by comparing the yields of nominal Treasury bonds and inflation-protected securities, effectively extracting the market's implied future inflation expectations.
Historical Context
The Federal Reserve closely monitors this rate to gauge long-term inflation expectations and inform potential monetary policy adjustments.
Key Facts
- Represents market expectations of inflation 5-10 years in the future
- Derived from Treasury bond and TIPS yield differences
- Used as a critical indicator of long-term economic stability
FAQs
Q: What does the 5-Year, 5-Year Forward Inflation Expectation Rate indicate?
A: It shows the market's expected average inflation rate five years from now, looking five years ahead. This helps economists and policymakers understand long-term inflation expectations.
Q: Why is this rate important for investors?
A: Investors use this rate to assess potential future economic conditions and make informed investment decisions. It provides insight into expected price levels and potential monetary policy changes.
Q: How is the T5YIFR calculated?
A: The rate is calculated by comparing yields of nominal Treasury bonds and Treasury Inflation-Protected Securities (TIPS) to extract the market's implied future inflation expectations.
Q: How do central banks use this information?
A: The Federal Reserve uses this rate to understand market expectations and potentially adjust monetary policy to maintain price stability and economic growth.
Q: How often is this data updated?
A: The 5-Year, 5-Year Forward Inflation Expectation Rate is typically updated daily, reflecting real-time market sentiment and expectations.
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Citation
U.S. Federal Reserve, 5-Year, 5-Year Forward Inflation Expectation Rate [T5YIFR], retrieved from FRED.
Last Checked: 8/1/2025