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  • John Pickart

Real Yields Negative



Real yields negative and that doesn't take into account taxes.


Currently, the 10-year U.S. treasury constant maturity yield is 0.72% (blue line lower panel) and the 10-year TIPS breakeven is 1.10% (black line upper panel). So, the real yield is -0.38% (red line lower panel).


One way to think of the breakeven is that it's the expectation for inflation over the period. If inflation expectations are 1.10% but the treasury bond yields 0.72%, you lose out to inflation by 38 basis points. For reference, the CPI was 1.5% YoY as of March (gold line upper panel).



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