US 10-year real yield drops to lowest since 2012

The US 10-year Treasury real or inflation-adjusted yield has declined to -0.88%, the lowest level since 2012. The real yield was around zero percent earlier this year. 

The sharp decline could be attributed to the Fed's bond purchases and other liquidity-boosting measures aimed at stabilizing the COVID-hit financial markets. Gold, a zero-yielding safe haven, has picked up a strong bid amid the decline in the real yield. The yellow metal rose to a nine-year high of $1,873 per ounce early Thursday, taking the year-to-date gain to 23.5%. 

A Financial Times article notes that TD Securities thinks the Fed will soon expand its Treasury debt purchases in order to prevent long-dated nominal yields rising, leading to a deeper drop in the 10-year real yield toward -1.5%.