Breakeven Inflation Rate

Calculates the breakeven inflation rates of the US Treasury curve on a day: the nominal par yield minus the real (TIPS) par yield of the 5, 7, 10, 20 and 30-year maturities. It is the rate of inflation that would make an investor indifferent between holding a nominal Treasury and a TIPS of the same maturity, and is widely used as a market-implied measure of expected inflation.

The formula is as follows:

Where both yields are the Treasury’s par yield curve rates (nominal and real), the simple difference FRED publishes as T5YIE and T10YIE, not (1 + Nominal) / (1 + Real) - 1.

The breakeven rate is often read as the market’s expected inflation, but it also contains an inflation risk premium, which raises it, and a liquidity premium on inflation-linked bonds, which lowers it, so it rises and falls in market stress for reasons other than inflation expectations. The comparison is with CPI-U, the index TIPS pay on. The daily history, with the 5-year, 5-year forward rate, is get_inflation_expectations in the Economics module; for yields of your own, use yieldcurve_model.get_breakeven_inflation_rate.

Also known as: TIPS breakeven spread, inflation breakeven.

Breakeven Inflation Rate in Python or via the MCP

Install the Finance Toolkit with:

pip install financetoolkit -U

Then call get_breakeven_inflation_rate as shown below.

from financetoolkit import FixedIncome

fixedincome = FixedIncome()

fixedincome.get_breakeven_inflation_rate(date="2026-11-05")

Or, after setting up the Finance Toolkit MCP, ask:

Which returns:

Parameters

get_breakeven_inflation_rate accepts the following parameters.

Related Bond Valuations