Real yield
Fixed IncomeDefinition
Inflation-adjusted yield. Most directly observable as the yield on Treasury Inflation-Protected Securities (TIPS).
Real yield = nominal yield − inflation rate. Positive real yields tighten financial conditions; negative real yields are stimulative. The 2020-2021 era of −1% real yields supercharged housing and growth stocks; the 2022-2023 spike to +2% real produced the worst bond bear in modern history.
Real yield = nominal yield − inflation rate. Positive real yields tighten financial conditions; negative real yields are stimulative. The 2020-2021 era of −1% real yields supercharged housing and growth stocks; the 2022-2023 spike to +2% real produced the worst bond bear in modern history.