Real Short-Term Rates Are Close to 0%

On Tuesday, the yield on the three-month Treasury closed at 1.70%. That’s the highest since September 2008. It’s also very close to the rate of inflation.

This means that real short-term interest rates might actually be positive for the first time in a decade.

I don’t know exactly what the inflation rate is at the moment since the CPI reports come out the following month. However, trailing core CPI has been running close to 1.7% for the last few months. It’s at 1.85% through January. We’ll get the February report on March 13.

Posted by on March 7th, 2018 at 3:00 pm


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