Skip to content
May 16 2022

How Do Yields React To Inflation? SLOWLY!

  • May 16, 2022

By the end of last year, the annual Consumer Price Inflation (CPI) rate soared to 7% and rose above 8.5% by March. So how did bond yields react to the biggest inflation surge in over 40 years? Since April 2021, the inflation rate has been greater than 4% and ended the year at 7%, yet the 10-year U.S. Treasury yield was only 1.5% as of December and is currently just 2.9%—the lower end of U.S. history. Indeed, looking back to 1872, today’s inflation rate is higher than 88% of the time, whereas the 10-year Treasury yield is still lower than about 80% of the time!


For full access, please enter your credentials.

About The Author

James Paulsen / Chief Investment Strategist

Interested in Investing in a Model?

Contact us if you are interested in investing in our ETF models.