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.
Public research record
Research framework · page evidenceCompleted application: Real Yield
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.
| Type | Claim | Scope |
|---|---|---|
| Release fact | A bond yield net of expected inflation — the inflation-adjusted compensation for holding duration, observed directly via TIPS. | Rates |
| Release fact | 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. | Published example |
Countercase, invalidators, and sources
The relationship is conditional: another driver can dominate the same asset over the selected horizon.
- · The underlying observation changes materially.
- · The selected asset has no measurable exposure to this mechanism.
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.