The Spread Between the 30-Year Treasury Bond Rate and the 30-Year TIPS Rate Is Now 2.22%/Year

Suppose that we assume the two states of the world are permanent liquidity trap, with inflation at 1%/year indefinitely, and inflationary blowout with inflation at 10%/year starting ten years from now…

Then the 30-year-TIPS breakeven probability--the chance that we will get an inflationary blowout starting ten years from now that would make the expected returns from investing in TIPS and nominal bonds equal--is 0.094…