Latest / The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy
Why the 10-Year Breakeven Rate Is Stuck at 2.23 Percent
Episode 98 of The Macro Memo dives into a quiet but telling number: the 10-year breakeven inflation rate has been locked at 2.23 percent for weeks, even as core PCE and CPI tick higher. Lucas and Luna unpack why the bond market's inflation expectations aren't budging — and what that means for the Fed's next move. They walk through the mechanics of TIPS and nominal Treasuries, the role of liquidity premiums, and how a flat breakeven can coexist with sticky price data. Specific data points include the 10-year Treasury yield at 4.48 percent and the Fed funds rate at 3.63 percent…
The skinny
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