Wednesday, 12 April 2006

Government bond yields in major economies

Barry Ritholtz asks: Why have yields on US Treasuries been so much above other nations?

Actually, real yields in the US are pretty low.

 Yield on 10-year
government
bonds
Inflation rateReal
bond yield
US4.793.61.19
UK4.362.02.36
Canada4.212.22.01
Germany3.721.91.82
Japan1.700.41.30

With the exception of deflation-prone Japan, the other nations have real yields about twice that of the US.

Perhaps the better question to ask is: Why has the US inflation rate been so much above other nations?

Or: Why has the Federal Reserve been so much more tolerant of inflation than other central banks?

2 comments:

Tax Shelter said...

the real yield can be distorted/manipulated depends on which measures of inflation rate one chooses to use.

lim said...

The real yield in the above table is based on overall inflation for all five countries.

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