# Real Yields Turn Positive on 10-year TIPS

On January 18, real yields turned positive on 10-year TIPS. Markets are possibly getting a bit more optimistic. Here are a couple of representative real yield curves. Essentially, during the last week the real yield curve shifted up about 14 basis points. (To get the complete data in an Excel 2007 workbook, click here.)

Nominal yields shifted up about 19 basis points in the longer maturities. Thus there was an increase in inflation expectations of about 5 basis points.

We can easily construct an inflation expectations curve. Expected inflation is simply the difference between the nominal and real interest rate for each maturity. Here’s what it looks like: