TIPS real yields hit highest since before pandemic, reshaping retirement income

Macro
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Real yields on Treasury Inflation-Protected Securities have climbed to their highest levels since before the Covid pandemic, with the 10-year TIPS real yield recently at about 2.1%, more than double its decade average of 0.9%, according to a MarketWatch analysis by Mark Hulbert. The one-year real yield stood at 2.2%, compared with a decade average of just 0.3%, while U.S. Treasury data as of July 17, 2026 showed real yields of 2.01% at five years, 2.31% at 10 years, and 2.87% at 30 years. A 30-year TIPS ladder now produces a guaranteed inflation-adjusted withdrawal rate of about 4.9% per year, up from slightly above 4% earlier this decade, and Morningstar research found a 30-year TIPS ladder supports a 4.8% withdrawal rate versus 3.9% for the best traditional portfolio strategy. Collin Martin of Schwab Center for Financial Research cautioned that TIPS carry interest-rate risk and credit-quality risk, while holding them in tax-deferred accounts avoids the phantom income tax on inflation adjustments. Analysts warn the window for elevated yields may close if inflation expectations fall or the Federal Reserve cuts rates aggressively.

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