TIPS Market Signals Inflation Fatigue as CPI Hits Five-Year Low and Fed Stays Cagey

If you’re looking for drama, the TIPS market is not the place to be right now. But for macro traders who care about what’s actually moving the needle, the silence in inflation-protected Treasuries is deafening. The iShares TIPS ETF sits at $111.37, unchanged, as the US CPI prints its lowest reading in nearly five years. The market’s collective yawn says more about the state of inflation expectations than any FOMC press conference ever could.

On February 13, 2026, Fast Company reported that a key inflation measure has dropped to a five-year low, thanks to cooling rents and falling gas prices. Bloomberg and WSJ both noted that Treasury yields slipped after the CPI print, but the TIPS market barely flinched. The ETF hasn’t budged, and breakeven inflation rates are stuck in the mud. Even as Wall Street obsesses over every syllable from Fed officials, Main Street is starting to believe that inflation is yesterday’s problem.

Let’s talk numbers. The 10-year breakeven inflation rate is hovering around 2.18%, barely changed from a month ago. The TIPS ETF at $111.37 is flat, and volumes are anemic. CPI came in below expectations, but the market reaction was a collective shrug. The Fed’s Goolsbee is still warning about AI-driven supply shocks, but traders are pricing in fewer rate cuts, not more. The S&P 500 just logged its worst week since November, and yet the TIPS market is the eye of the storm.

This isn’t just about one CPI print. The context is a market that’s been whipsawed by every macro narrative imaginable: “sticky” inflation, “transitory” inflation, “AI-driven” inflation, and now, apparently, “inflation fatigue.” The TIPS market is the canary in the coal mine for inflation expectations. When breakevens are this stable, it’s a sign that the market is done panicking. The last time we saw this kind of apathy was in late 2018, right before the Fed’s infamous “pivot.” Back then, TIPS were a dead zone for months, only to explode higher when the market realized the Fed had over-tightened.

Cross-asset correlations are breaking down. Commodities are flat, with DBC at $23.88, and tech is in a holding pattern. The only thing moving is volatility itself, and even that is starting to look tired. The TIPS market’s lack of movement is a signal, not a bug. It tells you that inflation risk is being priced out, and the next big move will come from a surprise, not a trend.

Here’s the rub: the consensus is now so comfortable with “low inflation” that any upside surprise could cause a stampede. The options market is not priced for a vol spike in TIPS, and positioning is light. The risk is asymmetric. If the next CPI print comes in hot, or if oil prices spike, the unwind could be brutal. But for now, the market is betting that inflation is dead and buried.

Strykr Watch

The TIPS ETF is boxed in between $110.80 support and $112.20 resistance. The 20-day moving average is flat at $111.30, and the RSI is a comatose 48. Breakeven inflation rates are stuck near 2.18%. There’s no momentum, no trend, just a market waiting for a catalyst. If $112.20 breaks, you could see a quick move to $114. If $110.80 fails, look out below.

The biggest risk is complacency. If the Fed surprises with a hawkish tilt, or if inflation data turns up, the TIPS market will wake up fast. The other risk is a macro shock, geopolitical, supply chain, or energy, that reignites inflation fears. But for now, the market is pricing in a long nap.

On the opportunity side, this is a classic “sell vol” setup for options traders. With implied volatility at multi-year lows, you can sell strangles or iron condors and collect premium while the market sleeps. For directional traders, a break of $112.20 is your long trigger, while a flush below $110.80 is your short. Just don’t fall asleep at the wheel.

Strykr Take

The TIPS market is telling you that inflation is yesterday’s story. But markets have a way of punishing consensus. If you’re a trader who likes to fade the crowd, start building your positions now. The next move won’t be slow.