5Y vs 10Y Breakeven Inflation
5Y Breakeven Inflation (FRED T5YIE) measures market-implied 5-year inflation expectations. 10Y Breakeven Inflation (FRED T10YIE) measures 10-year.
Also known as: 5Y Breakeven Inflation (5Y breakeven, 5Y inflation expectations) · 10Y Breakeven Inflation (10Y breakeven, breakeven inflation, inflation expectations)
Why This Comparison Matters
5Y Breakeven Inflation (FRED T5YIE) measures market-implied 5-year inflation expectations. 10Y Breakeven Inflation (FRED T10YIE) measures 10-year. April 2026: 5Y breakeven approximately 2.58%; 10Y breakeven approximately 2.44%. 5Y above 10Y by ~14bp = inverted breakeven curve. Reflects near-term inflation pressure (Iran war + tariffs adding to headline CPI) vs long-term mean reversion to Fed 2% target. 5Y5Y forward breakeven (FRED T5YIFR) approximately 2.15% (long-term anchored near Fed target). Inversion typical during near-term inflation surprises. Resolution: 5Y declines as near-term pressure fades OR 10Y rises if inflation persists.
The April 2026 Configuration
5Y Breakeven (FRED T5YIE): ~2.58% (April 2026). Range 2024-2026: 2.0%-2.8%. Currently elevated.
10Y Breakeven (FRED T10YIE): ~2.44% (April 2026; 10Y nominal 4.31% minus 10Y TIPS ~1.87%). Range 2024-2026: 2.0%-2.6%.
5Y-10Y spread: ~14bp (5Y above 10Y). Inverted breakeven curve. Reflects near-term inflation pressure.
5Y5Y forward breakeven (FRED T5YIFR): ~2.15% (April 2026 reading on the Fed-published constant-maturity series, the cleanest "5-year inflation expectation 5 years from now" measure). Long-term anchored just above Fed 2% target.
Inversion drivers: (1) Iran war elevating near-term oil (WTI ~$98 late April vs pre-Iran low-$60s). (2) Trump tariffs adding ~0.7pp to headline CPI. (3) Sticky services inflation (supercore ~4%). (4) Long-term Fed credibility keeping 5Y5Y forward inside 2.0-2.3% range.
April 2026 reading: market pricing near-term inflation 2.58% (above 2% target) declining to long-term ~2.15% on the 5Y5Y forward. Healthy term structure showing Fed credibility holds for long-term while acknowledging short-term pressure. Note: a straight algebraic derivation from the breakeven curve (10Y * 10 - 5Y * 5) / 5 gives ~2.30%; the FRED T5YIFR constant-maturity TIPS construction lands closer to 2.15%, and the FRED series is the standard reference.
Conditional Forward Response (Tail Events)
How 10Y Breakeven Inflation has historically behaved in the 5 sessions following a top-decile or bottom-decile daily move in 5Y Breakeven Inflation. Computed from 1,246 aligned daily observations ending .
Following these triggers, 10Y Breakeven Inflation falls 0.01% on average over the next 5 sessions, versus an unconditional baseline of +0.05%. 124 qualifying events; 10Y Breakeven Inflation closed positive in 51% of them.
90-Day Statistics
Explore Each Metric
Related Scenarios & Forecasts
Get daily macro analysis comparing key metrics delivered to your inbox. Stay ahead of market-moving divergences.
Frequently Asked Questions
What is the April 2026 5Y vs 10Y breakeven configuration?+
5Y breakeven (FRED T5YIE) ~2.58% (April 2026, range 2.0-2.8%). 10Y breakeven (FRED T10YIE) ~2.44% (range 2.0-2.6%). 5Y-10Y spread ~+14bp (inverted breakeven curve, 5Y above 10Y). 5Y5Y forward (FRED T5YIFR) ~2.15% (long-term anchored just above Fed 2% target). Inversion reflects near-term inflation pressure (Iran war + tariffs) vs long-term mean reversion to Fed target. Healthy term structure showing Fed credibility holds.
What does the inverted breakeven curve mean?+
Inverted curve (5Y above 10Y) reflects market expectation that near-term inflation ~2.58% will mean-revert to long-term ~2.15% (5Y5Y forward, FRED T5YIFR). Drivers of near-term pressure: Iran war elevating WTI into the $94-$110 range during April 2026 versus a pre-Iran low-$60s base, Trump tariffs adding ~0.7pp to headline CPI, sticky services inflation supercore ~4%, Fed credibility anchoring long-term expectations. Resolution: 5Y declines as Iran/tariffs fade, OR 10Y rises if inflation persists.
What are historical 5Y-10Y breakeven cycles?+
2008-09 GFC: 5Y collapsed to 0% (deflation scare), 10Y to 0.5%. -50bp inversion reverse. 2015-2016 commodity collapse: -50bp deep inversion. 2020 COVID: 5Y 0.5% deflation. 2021-2022 inflation surge: 5Y 3.5% peak (March 2022), 10Y 3.0% peak. +50bp peak inversion. 2022-2024 disinflation: re-flattening. 2024-2026: 5Y 2.58% + 10Y 2.40% +18bp modest inversion. April 2026: healthier than 2022 peak but elevated.
How does the term structure inform Fed credibility?
Related Comparisons
Explore Across Convex
Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.