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 rate | Real bond yield | |
| US | 4.79 | 3.6 | 1.19 |
| UK | 4.36 | 2.0 | 2.36 |
| Canada | 4.21 | 2.2 | 2.01 |
| Germany | 3.72 | 1.9 | 1.82 |
| Japan | 1.70 | 0.4 | 1.30 |
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:
the real yield can be distorted/manipulated depends on which measures of inflation rate one chooses to use.
The real yield in the above table is based on overall inflation for all five countries.
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