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Greg Ip explains that inflation risk—the possibility inflation may differ from expectations due to factors such as supply shocks or fiscal dominance—is not accounted for in the breakeven rate.
Instead, he notes that this risk is more likely represented in the term premium.
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Greg Ip previously reported on Stan Druckenmiller's criticism of Treasury Secretary Scott Bessent, who was warned that persistent yield defense could pose risks to the market environment in an earlier article. He also covered top tech firms' $3 trillion in off-balance-sheet AI commitments, noting the scale relative to their other obligations in a separate report. These topics show Ip's ongoing attention to factors influencing risk and expectations in financial markets.