Inflation is ROARING.

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Five year breakevens, which is a key inflation measure, just hit a new all-time high of 3.0% (started in 2002). Inflation expectations running out to five years are now higher than at any point in the last ~20 years.

Unfortunately, that’s not even the end of the bad news. The 10-year breakeven rate (inflation expectations 10 years out) hit 2.7044% this week.

This is noteworthy first and foremost in that it is higher than the previous peaks experienced in 2011, 2012, and 2013. Indeed, the last time 10-year breakevens hit 2.7% was in 2006.

At that time the Fed was actively hiking rates: Fed Funds rates were 4.75%, on their way to 5.25%.

Today, Fed funds rates are at zero and the Fed is running a $120 billion Quantitative Easing (QE) program: the single largest monthly QE program in the Fed’s history. Even more incredibly, the Fed has been staging a public debate as to whether it needs to taper this program… for months.

Put simply, there is NO signal that the Fed is going to stop inflation from roaring.