Global Pendulum
English

Issue 1 · Late October 2026

Expected inflation → US 10-⁠yr yield

Common explanation (Cause · same direction): 10-year yield = real rate + the inflation markets expect (an identity).

This issue: Expected inflation at 73 (warm), US 10-⁠yr yield at 91 (hot) — both above normal, in line with the common explanation.

Hot and cold describe position, not good or bad: warm does not mean a fall is coming, and an extreme reading does not mean a quick reversal. We describe history only, with no buy or sell advice.

050100
Hover over a pendulum or tick to see its name; click to open that indicator.Tap a pendulum or tick to see its name; tap again to open that indicator.

Where it stands now

Where the two indicators stand this issue

Expected inflation: Now 2.35%. US 10-⁠yr yield: 2.09 percentage points above its 10-year average.

Tests

Does this link hold up?

  1. Common explanation10-year yield = real rate + the inflation markets expect (an identity)Source: Federal Reserve Board, “Tips from TIPS: Update and Discussions” (2019).
  2. Tested against our dataAgreement between the positions of Expected inflation and US 10-⁠yr yield (same month), measured in the direction of the common explanation: +0.59. Looking at every 5-year period (shifted one year at a time), the two moved in that direction in 7 of 9; data start only in 2012. Supported by the data
  3. Periods when it did not holdAcross 9 5-year periods, out of step in 2012⁠–⁠2017 and 2020⁠–⁠2025.

History

The two lines, overlaid

Data: 10-year nominal minus real yield from Federal Reserve H.15 (calculated by this site), via FRED (Federal Reserve Bank of St. Louis); Federal Reserve H.15, via FRED (Federal Reserve Bank of St. Louis). Positions: our calculation.

Expected inflationUS 10-⁠yr yield

Time lag

At what lag do they match best?

Longer bar = moves more in the direction of the common explanation (the number is the agreement).

Limits

What this card cannot tell you

Back to all links