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GOVERNMENT-BOND YIELDS "Real" yields are, strictly, nominal yields less expected inflation.
GOVERNMENT-BOND YIELDS At 5.5%, ten-year British government bonds have one of the highest nominal yields of the countries shown in the chart.
Nominal yields are close to historic lows.
"Real" yields are, strictly, nominal yields less expected inflation.
Indeed, about $6tn£4.23tntn) of government bonds around the world today have negative nominal yields.
Nominal yields may shrink further, but the problems are not getting any smaller.
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In such circumstances, a negative nominal yield could still deliver a positive return in real (inflation-adjusted) terms.
As a result, the nominal yield on the 10-year Treasury bond, a widely used measure of the federal government's borrowing costs, hovers around 2%.
They own assets with a positive nominal yield and fund themselves by creating either reserves or currency, which yield next to nothing.
Britain, which has the highest nominal yield, a hefty 7.1%, ranks tenth in real terms because it has the highest inflation rate: 3.3%.
A nominal yield of 3-4% looks attractive in real terms if prices are falling.But will this appetite continue as governments churn out more debt?
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