Breakeven inflation
The gap between the yield of an ordinary government issue and that of an inflation-linked bond of the same maturity: the inflation rate at which both deliver the same outcome.
Formula
The nominal yield of the ordinary issue less the real yield of the linker of comparable maturity. Both must come from the same issuer, otherwise credit risk lands in the difference as well.
How to read the number
Read it as the break-even point of a choice: above that rate of inflation the linker wins, below it the ordinary issue does.
When the metric lies
Also known as: break-even rate, inflation breakeven