Latest / The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy
The 10-Year Breakeven Tells a Different Inflation Story
On this episode of The Macro Memo, Lucas and Luna dig into the 10-year breakeven inflation rate — currently at 2.21 percent — and explain why it's sending a more reassuring signal than the headline CPI or core PCE numbers. They unpack the mechanics of TIPS versus nominal Treasuries, why the breakeven has barely budged even as the core PCE hit 3.4 percent in May, and what this divergence means for the Fed's next move. With the fed funds rate stuck at 3.63 percent and real GDP growth running at just 2.1 percent annualized, the bond market is betting that today's inflation spike…
The skinny
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