10-Year Real Yield (TIPS)
The real yield is what a lender earns after inflation is stripped out. It is the discount rate that equity valuations are implicitly competing against, which is why it matters more than the headline 10-year.
History
What a real yield is
["A nominal Treasury pays a fixed number of dollars. A TIPS pays a fixed real coupon and its principal is adjusted with CPI, so its yield is already net of expected inflation. The 10-year TIPS yield is therefore the market's price for lending to the U.S. government for a decade in purchasing-power terms.
", 'Subtract it from the nominal 10-year and you get breakeven inflation — what the market expects CPI to average over the period. Both numbers come from the same curve, so reading them together separates "rates are high because growth is strong" from "rates are high because inflation is expected".
']Why equity investors should care
['Every valuation model discounts future cash flows at some rate. When the risk-free real yield is negative, the discount rate is negative and long-duration assets — growth stocks, in particular — get a mechanical lift. When it turns positive and rises, that lift reverses.
', 'The 2020–2021 period is the cleanest example in the record: the 10-year real yield fell to about −1.2%, and the ratio between equity valuations and bond yields reached extremes not seen before. The subsequent rise to positive territory coincided with the drawdown in long-duration equities.
']Two decades, two regimes
['The series only starts in 2003, which is a limitation worth stating plainly: it does not cover the 1970s and 1980s, when real yields were far higher. Within its own history, though, the range is wide — from deeply negative during the pandemic to around +2.5% in 2023–2024.
', 'Because the window is short, we compute the percentile only against 2003 onward. Do not read a 95th-percentile print as "highest in history"; read it as "highest since TIPS became a liquid market".
']How we calculate it
["We use DFII10, the 10-year constant-maturity real yield from the Treasury's daily curve, as published through FRED. No smoothing, no interpolation. The percentile is the share of daily observations since January 2003 below today's value.
", 'The companion nominal series is DGS10 and the implied inflation expectation is T10YIE; both are public domain.
']Distribution since 2003
Each row is the share of historical observations at or below that level. A reading in the 90th percentile is higher than nine tenths of the record.
Important
Not investment advice. This page is published for information and education only. It is not a recommendation, solicitation, or offer to buy or sell any security. Market data may be delayed, incomplete, or revised. Indicators describe the past; they do not forecast returns. Past performance does not guarantee future results. Do your own research or consult a licensed financial professional before acting on anything you read here.
Questions
Why does the series only go back to 2003?
TIPS were introduced in 1997 but did not become liquid enough for a reliable constant-maturity 10-year series until 2003. Anything earlier would be a model estimate, not a market price.
Is a high real yield bad for stocks?
Mechanically it raises the discount rate, which compresses valuation multiples, especially for companies whose cash flows arrive far in the future. It is not a timing signal on its own.
How is this different from the nominal 10-year yield?
The nominal yield includes expected inflation plus an inflation risk premium. The TIPS yield strips both out, leaving the real return a lender locks in.
Why is the latest stretch of the chart locked?
The current reading and the full record are free to read. The most recent sessions are member-only, together with the overlay tools.