Here’s a worst-in-39-years story worth mentioning. By now everyone knows that November’s 6.88% Y/Y rise in the CPI (purple line) was the highest inflation figure since before July 1982, when the index posted at +6.56% on a year-over-year basis.
But what they haven’t been gumming about is the level of yields on the 10-year UST at those two end points. That’s probably because it gives any thinking person a case of instant vertigo. In July 1982 the 10-year UST was yielding 13.68%, implying a real yield of +712 basis points, whereas for the month of November 2021 the 10-year yield was 1.43%, implying a real yield of -545 basis points.
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