Heed The Cry Of Negative Real Yields
Negative real yields are falling again, and getting more media coverage this time. Is the narrative shifting from inflation hysteria to stagflation anxiety?
Negative real yields are falling again, and getting more media coverage this time. Is the narrative shifting from inflation hysteria to stagflation anxiety?
Another month, another red hot CPI reading, which has added even more fuel to inflation hysteria. However, the CPI’s component data tells us differently.
Negative real yields mean that inflation is expected to be higher than nominal yields. This gives us a big clue as to why real yields are currently negative.
What happens when prices of basic goods rise while income declines? For most people, it’s another day in our Covid reality. Economists call it Stagflation.