Real 10-year US yields are up for the first time since 2020

Federal Reserve in Washington

The Federal Reserve’s aggressive policy has resulted in a notable turnaround in 10-year real yields.

(Photo: Bloomberg)

Hanover The yield on 10-year inflation-linked government bonds (tips) rose as much as three basis points in Asian trading on Wednesday. This figure was positive for the first time in two years. This is an important step towards post-pandemic normalcy. This trend signals that investors expect 10-year nominal bond yields to exceed average inflation over the next 10 years.

The announcements of aggressive interest rate hikes by the Federal Reserve have led to a remarkable trend reversal in ten-year real yields, ie net of inflation. This value was below minus one percent in March after Russia invaded Ukraine. The US Federal Reserve raised interest rates by a quarter of a point last month and is signaling a relatively rapid pace of rate hikes for the remainder of the year

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