Inflation Analysis

The breakeven inflation rate represents a measure of expected inflation derived from 10-Year Treasury Constant Maturity Securities and 10-Year Treasury Inflation-Indexed Constant Maturity Securities. The latest value implies what market participants expect inflation to be in the next 10 years, on average. Source: Federal Reserve Bank of St. Louis

Historic levels of expected inflation are ranked and cut into quantiles. Inflationary regimes are in quantile 10 and deflationary regimes are in quantile 1.

Return/risk ratios for US equity economic sector returns and global asset class returns during each historic inflation regime are shown here.