Breakeven Rates: 1% for 2-Year and 2% for 10-Year
"Breakeven rates" are the differences in yields on regular and inflation-indexed T-notes over the same time horizon, and are measures from the bond market of the expected rates of inflation over those time horizons.
The current 2-year "breakeven rate" is less than 1% (0.935%, top chart), and down significantly from the recent peak of 2.67% in late April, and now at the lowest level since last year. The 10-year breakeven rate is trading at just slightly above 2% (2.046%), and was trading below 2% last week.
Although commodity markets are telling a different story, the bond market seems to be suggesting that inflationary expectations have been falling, and according to breakeven rates are now back to last year's levels.