U.S. long bond demand raises prospect of whole curve yielding below 1%

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Real yields, which adjust for inflation, have also been hitting record lows, with the yield on 10-year Treasury Inflation-Protected Securities (TIPS) US10YTIP=RR now more than negative 1%.

The slide in real yields reflects “ultra-easy monetary policy expectations and deteriorating macro conditions,” said analysts at Bank of America in a recent note. Inflows into inflation protected bonds could mean some investors are pricing the risk of stagflation, said the bank.

(This story was refiled to change headline to indicate U.S.)

Reporting by Ross Kerber in Boston and Karen Pierog in Chicago; additional reporting and editing by Megan Davies; Editing by Diane Craft and Steve Orlofsky

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