The 5-year breakeven inflation rate. Measures market expectations for average inflation over the next 5 years — more sensitive to near-term inflation shocks than the 10-year.
The 5-year breakeven reacts faster than the 10-year to commodity price shocks, supply chain news, and Fed rhetoric. Often leads the 10-year at turning points.
A rising 5-year breakeven signals near-term inflation fears. When the 5-year breakeven rises above the 10-year, markets expect inflation to be front-loaded.