7-year Breakeven Inflation Rate
T7YIEM • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
2.39
Year-over-Year Change
7.66%
Date Range
1/1/2003 - 7/1/2025
Summary
The 7-year Breakeven Inflation Rate measures market expectations of future inflation over a 7-year period by comparing Treasury Inflation-Protected Securities (TIPS) with nominal Treasury bonds. This metric provides crucial insights into long-term inflation expectations and market sentiment about future 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 represents the difference in yield between nominal and inflation-protected securities of the same maturity. Economists and investors use this indicator to gauge market-implied inflation expectations and assess potential economic pressures.
Methodology
The rate is calculated by subtracting the yield of a 7-year Treasury Inflation-Protected Security from the yield of a comparable nominal 7-year Treasury bond.
Historical Context
Central banks and policymakers closely monitor this metric to understand market expectations and inform monetary policy decisions.
Key Facts
- Reflects market-based inflation expectations over a 7-year horizon
- Provides forward-looking perspective on potential inflation trends
- Influenced by economic conditions, monetary policy, and market sentiment
FAQs
Q: What does the 7-year Breakeven Inflation Rate indicate?
A: It shows the market's expected average inflation rate over the next 7 years, derived from the difference between nominal and inflation-protected Treasury securities.
Q: How do investors use this metric?
A: Investors use it to make informed decisions about investments, assess potential inflation risks, and understand market expectations about future economic conditions.
Q: How is the breakeven inflation rate calculated?
A: It is calculated by subtracting the yield of a 7-year TIPS from the yield of a comparable nominal 7-year Treasury bond.
Q: Why is this metric important for policymakers?
A: It helps central banks and policymakers understand market expectations and potentially adjust monetary policy to manage inflation.
Q: How often is this data updated?
A: The 7-year Breakeven Inflation Rate is typically updated daily with current market yields and can fluctuate based on economic conditions.
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Citation
U.S. Federal Reserve, 7-year Breakeven Inflation Rate [T7YIEM], retrieved from FRED.
Last Checked: 8/1/2025