Source:Bianco Research
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Treasury Yields: The ‘Real’ Story from 1920 to Now (MarketBeat WSJ Blog)
Consider this: If the market geniuses are right, we’re nearing the end of the 31-year decline in interest rates. This is only the third bull market for bonds since the late 19th century. The first lasted from 1873-1899, the second from 1920-1946, the second from 1981 right up until the present day, more or less. Anyway, here’s a chart from Credit Suisse, part of the slide show that went along with its Monday morning macro conference call. It lays out the path of long term “real rates” since 1920. That is, interest rates minus inflation. Real rates tell you what your return is in terms of buying power. And for U.S. Treasurys, right now, it ain’t much. Credit Suisse doesn’t specify exactly what they’re using as their proxy for long rates.ey’re using as their proxy for long rates.
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