Chart of the Week: Is Inflation Contained?

Chart of the Week | October 11, 2021
Macro Insights

Is Inflation Contained?

• The 10-Year Breakeven Rate is an expected inflation measure over a 10-year time horizon by calculating the difference between the 10-year nominal Treasury yield and the 10-year Treasury inflation protected securities (TIPS).
• According to the above, the 10-year Breakeven Rate has hovered around the mid-2% mark since early 2021.
• Even though 10-year expected inflation has remained contained, investors must remain aware that supply chain bottlenecks, lingering COVID-related issues, elevating gas prices, increasing consumer prices, and growing policy uncertainty can all collectively cause elevated inflation over the next several years.