VGLT - Decoding The 'Real' Disconnect Between Interest Rates And Inflation

• “Real” rates are the interest rates that an investor receives after adjusting for inflation - in this sense they are the “real” yield you receive from owning the asset.
• With economies still chugging along and yield-eating inflation rising, investors are piling back into Treasuries. The result is real yield dynamics plunging to record lows in the U.S., with the 10-year U.S. Treasury yield around 1.3%, inflation expectations around 2.3% and a real yield at -1.0%.
• While continued concerns over the spread of the virus may be having an effect, a number of “non-economic” investors are currently creating excess demand for longer-dated Treasuries and driving nominal rates down.

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