Real yield
A bond yield adjusted for expected inflation, usually read from inflation-protected Treasury securities (TIPS).
A real yield is the return on a bond after removing inflation, roughly the nominal yield minus expected inflation over the bond's life. In the US, the most widely watched real yields come from Treasury Inflation-Protected Securities, whose principal adjusts with the CPI. Real yields are the market's measure of the return above inflation.
On our site, real yields are shown for common maturities, with the nominal yield and breakeven inflation side by side. The difference between nominal and real yield is the breakeven rate.
Traders care because real yields are a key driver of gold, growth stocks and the dollar. Rising real yields raise the opportunity cost of holding non-yielding assets such as gold.
Worked example (illustrative numbers, not real data): a 10-year nominal Treasury yields 4.5 percent and the 10-year TIPS yields 2.0 percent. The breakeven inflation rate is 2.5 percent. If real yields rise to 2.5 percent while nominal yields are unchanged, the breakeven falls to 2.0 percent.