U.S. Bond Yields Broke Zero

    So-called real interest rates, measured by the yield on 10-year inflation-protected Treasuries, are falling as fixed-income investors look bearish on the economic outlook. But there's another driver: the growing expectation that aggressive stimulus from the Fed will eventually push up inflation. Ultimately, the 10-year real yield fell to -0.66% on Monday, the lowest level since early March. This yield excludes inflation and is considered a pure growth indicator.

 

    "The bond market reflects a belief that yes, the economy is opening up, but the pace is going to be very, very slow," said Peter Boockvar, chief investment officer at Bleakley Advisory Group. "And there will be inflation pressure."

The global hunt for yield may also have contributed to the decline in real interest rates. Nominal Treasury yields may be far from record lows