The “real” interest rate on savings accounts and CDs is similarly negative in the -7.0% range. The real yield of short-term Treasury bills is similarly negative in the -7.0% range. Even the 10-year Treasury yield, now at 1.7%, is -5.3% in real terms
Even most junk bonds are traded with yields below the rate of inflation. The average BB-rated “real” junk bond yield is -3.3%. Taking more risk, the average B-rated “real” yield is -2.0%.
What the Fed is doing is called “financial repression.”
The Fed’s year-long refusal to deal with inflation, while talking down and brushing off this worsening inflation, after having triggered it with its monetary policies, including $4.6 trillion in QE – let’s just stick to calling it money-printing – in 22 months, cements this Fed under Chair Powell as the most reckless Fed ever as seen by the “real” EFFR chart above and by the Wealth Disparity chart below.Most Reckless Fed Ever: “Real” Federal Funds Rate Now the Most Negative Ever | Wolf Street