5-Year, 5-Year Forward Inflation Expectation Rate
Monthly
T5YIFRM • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
2.32
Year-over-Year Change
-1.69%
Date Range
1/1/2003 - 7/1/2025
Summary
The T5YIFRM represents the 5-Year, 5-Year Forward Inflation Rate, a critical market-based measure of long-term inflation expectations. This metric provides economists and policymakers with insights into how financial markets anticipate future inflation trends.
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 5-Year, 5-Year Forward Inflation Rate is derived from Treasury Inflation-Protected Securities (TIPS) and nominal Treasury yields, reflecting market participants' inflation expectations over a forward-looking period. Economists use this indicator to assess potential inflationary pressures and monetary policy effectiveness.
Methodology
The rate is calculated by comparing the yields of nominal Treasury bonds and inflation-protected securities, adjusted to project expected inflation rates five years into the future.
Historical Context
Central banks like the Federal Reserve closely monitor this metric to gauge market sentiment and inform monetary policy decisions.
Key Facts
- Represents market-based long-term inflation expectations
- Derived from Treasury securities pricing
- Important indicator for monetary policy decision-making
FAQs
Q: What does the 5-Year, 5-Year Forward Inflation Rate indicate?
A: It shows market expectations of average inflation rates five to ten years in the future, providing insight into long-term economic outlook.
Q: How do investors use this metric?
A: Investors use this rate to understand potential future inflation and make informed investment decisions about fixed-income securities and other financial instruments.
Q: How is this rate calculated?
A: The rate is calculated by comparing yields of nominal Treasury bonds and Treasury Inflation-Protected Securities (TIPS) to extract implied inflation expectations.
Q: Why is this metric important for policymakers?
A: It helps central banks like the Federal Reserve assess market expectations and potentially adjust monetary policy to manage inflation.
Q: How often is this data updated?
A: The T5YIFRM is typically updated monthly, providing a current view of market-based inflation expectations.
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Citation
U.S. Federal Reserve, Monthly [T5YIFRM], retrieved from FRED.
Last Checked: 8/1/2025