![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh18-pNJaUtEU0sIzqkuHQbjwyyHcm0i8LYbF1bmmQ13gvPsZDolPLDviKxtj7owFrHOnU0QzLZT_s33NsIvGCMsf8wdz4WvtcBUu78Q8mdt4-0HcKb_pUWWj4W5sVDJ0qsZYR-nLmrwJo/s400/inflation+compensation.png)
Here (in blue) is the yield on an inflation-adjusted bond and (in red) the yield on a nominal bond of approximately the same time-to-maturity. The negative inflation compensation that showed up
a few months ago (when the blue line was well above the red) has shrunk to about zero. These relative yields are moving back toward a more normal, and healthier,
alignment.
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