At 10am ET, 10 year Treasury yields were at 4.8%, up from 4.7% at Friday’s close (delta 8 bps). TIPS 10 year were at 2.35% up from 2.32% (delta 3 bps). Here’re some 5 year inflation expectations data over the last year.

(Click on image to enlarge)

Figure 1: Five year Treasury-TIPS breakeven (blue), expected inflation (red), and median expected inflation from U.Michigan survey (green squares), all in %. Last observation 1/11/2025. Source: Treasury, Fed DKW, and U.Michigan.

Median 5 year expectations went from 3.0% in October to 3.2% in November, and 3.3% in January (prel.). Interestingly, the 75th percentile (as opposed to median) expectation from the U.Michigan survey jumped from 5.5% in October to 7.7% in November.

The NY Fed consumer survey indicates the median 3 year ahead inflation jumped from 2.54% to 2.97% going from October to December.

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