Real Yields Drop to Record Low, Investors Lap Up Inflation Debt
- Moves in inflation-linked debt come amid flows into ETF
- China crackdown on tech adds to bid for haven assets
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The real yield on 10-year Treasuries fell to a record low as concerns mounted over the outlook for economic growth even as investor flows fueled appetite for inflation-linked debt.
The real rate, which strips out the expected impact of inflation over the next decade, fell as much as six basis points to minus 1.13%. The move was compounded by a lack of trading liquidity, with the 10-year breakeven rate -- a market proxy for the predicted average annual rate of consumer price gains over the next decade -- topping 2.41% Monday in the wake of substantial flows into the largest exchange-traded fund that’s tied to inflation bonds.