Inflation Breakeven
The implied inflation rate embedded in the gap between a nominal Treasury yield and a Treasury Inflation-Protected Security (TIPS) yield of the same maturity. Computed as nominal yield minus real (TIPS) yield. In a frictionless market, the breakeven would equal expected inflation; in practice, it is biased downward by the TIPS liquidity premium and upward by the inflation risk premium nominal-bond holders charge. The two adjustments partially offset, so realized inflation can diverge from breakevens by meaningful margins. The most-cited market-based inflation expectation indicator.
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10Y Treasury · Altman Z-Score · Asset Sensitivity · Basel III · Bond ETF · Bretton Woods
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