Key Points
10-year Treasury yields have increased by nearly half a percentage point from the end of August.
- Investors are pricing in higher real rates rather than higher inflation.
- 5-year breakeven inflation - equal to the difference in yield between 5-year Treasuries and 5-year Treasury inflation protected securities (TIPS) – is around end-of-August levels.
- This measure indicates what investors expect CPI inflation will be on average over the next 5 years.

Continuing claims for unemployment insurance rose slightly though remain near the lowest levels seen since 2023.
- Generally healthy labor market conditions paired with persistent inflation informed the Fed’s decision to raise its policy rate in September.


