How to chart inflation breakevens

What breakevens tell you

Inflation breakevens — the yield spread between nominal Treasuries and TIPS — show the market's inflation expectations. A 10Y breakeven of 2.5% means the market expects 2.5% average annual inflation over the next decade.

The three breakevens that matter

5Y breakeven: near-term inflation expectations. 10Y breakeven: long-term expectations. 5Y5Y forward: inflation expectations 5-10 years from now — the Fed's preferred measure of long-run expectations.

Data and chart

FRED series: T5YIE (5Y), T10YIE (10Y), T5YIFR (5Y5Y forward). Connect FRED to Quadesto and chart all three on a single time series.