Traders Push Inflation Gauge to 13-Year High as Debate Rages
- Five-year breakeven touches level last seen before 2008 crisis
- Market at odds over whether actual price pressures will emerge
This article is for subscribers only.
As seemingly every policy maker and market prognosticator jumps into the inflation fray, those who are putting their money where their mouths are have pushed one gauge of expected price pressures to an almost 13-year high.
The five-year breakeven rate, a proxy for the annual inflation rate bond traders expect over the span, breached 2.7% Wednesday, the highest since July 2008. The move occurred as a key gauge of prices paid by service providers climbed for a third straight month, also to the highest in more than a decade, stoking further debate on the inflationary pressures building across the economy.