Inflation surge fuels negative real interest rates for leading economies
“The surge in inflation is leaving the world’s leading economies with their lowest real interest rates in decades, as central banks delay any abrupt tightening of the extra-loose monetary policy used to help weather the coronavirus crisis, arguing that the recent rise in prices is transitory.”
USAGOLD note: The real rate of return (shown in the chart above) took an even deeper dive into the negative after Financial Times posted this article. On Wednesday, the Bureau of Labor Statistics reported a 6.2% inflation rate. The yield on the 10-year Treasury is going in the other direction. It stands at roughly 1.5%. That sharp downturn is not as yet reflected in the accompanying chart.