The breakeven inflation rate represents the market’s expectation for average annual inflation over a specific time-period, calculated by comparing the yields of regular U.S. Treasury bonds and Treasury Inflation-Protected Securities (TIPS).
As of December 12, 2025, the 5-year breakeven inflation rate was 2.32%, and the 10-year breakeven inflation rate was 2.26%.
A rising 5-year breakeven inflation rate suggests that short-term inflation expectations are increasing, which could indicate concerns about inflationary pressures. A rising 10-year breakeven inflation rate, on the other hand, could signal concerns about long-term inflation trends.