Beneath Bond Market’s Surface, Tumbling Real Yields Boost Other Assets

U.S. Treasury yields have fallen close to record lows when adjusted for expected inflation, providing an extra boost to riskier assets in response to both better economic data and the promise of continued monetary stimulus. In recent months, the yield on 10-year Treasury inflation-protected security has dropped sharply even as the nominal 10-year yield has stayed roughly unchanged—a combination that suggests investors are both dialing up their inflation expectations and not worrying about any increase in short-term interest…


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