Economist Steve Moore thinks inflation’s days as a top-of-mind concern are numbered. During an appearance on Fox Business’s Kudlow show on June 26, the former senior adviser to Donald Trump pointed to one specific metric as his evidence: the five-year break-even inflation rate, which has plummeted from above 3.5% to as low as 1.92%.
That number, derived from the gap between regular Treasury yields and inflation-protected securities, essentially represents what bond investors are betting inflation will average over the next five years.
The number Moore is watching
The five-year break-even rate sat around 2.2% as of late June 2026, with an intraday reading of 1.92% on June 25. For context, that’s well below the Federal Reserve’s traditional 2% target on an expectations basis, and a dramatic decline from the 3.5%-plus levels seen earlier.
Moore’s interpretation is straightforward. The bond market is telling us that inflation is being tamed, and that the Fed won’t need to raise interest rates anytime soon.
