Real Yield
A bond yield net of expected inflation — the inflation-adjusted compensation for holding duration, observed directly via TIPS.
Definition
Real yield is the cleanest read on the cost of capital. It anchors discount rates for long-duration assets (growth stocks, gold, long credit) and tells you whether monetary policy is restrictive in real terms.
The US 10Y TIPS yield is the most-quoted benchmark; the 5Y TIPS is the most policy-sensitive.
Why it matters
Real yield is arguably the single most important variable in cross-asset pricing. A 100bp move in real yield has historically moved gold, the Nasdaq, and emerging-market equities materially.
Worked example
2022: 10Y real yield rose from −1.0% to +1.8%, driving a ~35% drawdown in the Nasdaq and a ~10% drop in gold despite high CPI prints.
Frequently asked
Why does real yield matter more than nominal?⌄
How do you read TIPS yields?⌄
What drives real yields?⌄
Why does gold track real yields?⌄
Track it on Market Ontology
Related terms
Trade real yield setups in real time
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