Source: FRED: DFII5 (US Treasury via Federal Reserve H.15)
Data through: Oct 15, 2026 · updated Oct 17 · Updates: Daily (business days)
WThe three bars show the last 3 weeks for this indicator, oldest left to newest right. Bar height reflects each reading relative to the other two — the tallest is the highest of the three, the shortest the lowest.
Historical context: Currently in the 99th percentile of all historical readings.
What this means right now: Real yields are between 2.25% and 2.75%, a restrictive footing. Readings here since 2003 fall in 5 episodes: 2006–07, a few days in October 2008, late 2023, the spring of 2024 and one that began in September 2026. The 2006–07 episode was followed by the 2008 recession and the October 2008 days fell inside it; those since 2023 have seen none. After the 15 month-ends here through 2025, the S&P 500 was higher a year later in 10.
Real 5-Year Yield (TIPS) · Daily · 2003–2026
NBER recessions
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Monthly values
Real 5-Year Yield (TIPS) — the last 12 months
Every month's reading, with the band the heatmap gives it. The chart above shows the same series in full.
Month
Value
Band
Oct 2026
2.58%
Within normal range
Sep 2026
2.73%
Within normal range
Aug 2026
2.18%
Healthy reading
Jul 2026
2.19%
Healthy reading
Jun 2026
1.93%
Healthy reading
May 2026
1.61%
Healthy reading
Month-end readings of the same series the chart shows, from real_5y_yield. Values are the current record, not point-in-time: a month that has since been revised shows its revised value.
What is the Real 5yr Yield?
The 5-year real yield (DFII5) is the market yield on 5-year Treasury Inflation-Protected Securities — the return an investor locks in AFTER inflation. It is a direct measure of how tight money actually is: nominal rates can be high simply because inflation is high, but the real yield strips inflation out and shows the true inflation-adjusted cost of capital.
Real yields set the gravity for asset prices. When the 5-year real yield is deeply negative (as in 2012–13 and 2021–22, bottoming at −1.91%), holding safe assets guarantees a loss of purchasing power. Investors are pushed into riskier assets, and long-duration assets (growth stocks, crypto, housing) trade at higher valuations. When real yields turn positive that support reverses: the 5-year real yield went from −1.9% in May 2021 to +1.5% by September 2022, sixteen months, most of it in the six months from March 2022. The S&P 500 fell 25% from January to October 2022.
The healthy zone is moderately positive: real yields of 0.5–1.5% mean capital has a real cost (no bubble subsidy) but policy is not squeezing the economy. Persistently negative real yields have come with emergency policy. Readings above about 2.5% have come with squeezes. The 2.59% peak of October 2023 arrived seven months after the March 2023 regional-bank failures, when the real yield had been 1.1–1.9%. The four closes above 4% in November 2008 were a crisis dislocation as TIPS liquidity evaporated.
How We Color-Code the Real 5yr Yield
Our heatmap colors this indicator against historically significant thresholds:
Below −1.50%
Extreme repression — below −1.5%, as at the 2021–22 trough (−1.91%); 271 days since 2003, nearly all in 2021
−1.50% – −0.75%
Deeply negative — emergency-era policy; 585 days since 2003, mostly 2012–13 and 2020–22
−0.75% – 0.00%
Transitional — mildly negative real yields; 903 days since 2003, in 2010–17 and 2020–22
0.00% – 0.50%
Positive but low — a normal policy footing; 1,107 days since 2003, mostly in the 2010s
0.50% – 1.50%
The goldilocks zone — capital has a real cost, policy is neither subsidizing bubbles nor squeezing growth; about 3 days in 10 since 2003 (1,708 of 5,951)
1.50% – 2.25%
Positive and firm — 1,006 days since 2003, mostly 2005–07 and since 2023
2.25% – 2.75%
Transitional — a meaningfully restrictive stance; 340 days since 2003, mostly 2006–07, and again from late 2023
2.75% – 3.50%
Very high — 15 days since 2003, all in 2007–08
Above 3.50%
Crisis-grade squeeze or dislocation — 16 days since 2003, all in October–November 2008 (the high 4.24%)
Historical Extremes — What Happened Next?
When this indicator reaches extreme levels, history shows consistent patterns:
Nov 26, 2008GFC TIPS Dislocation
4.24%
The all-time high — a crisis artifact, not a policy stance. Forced deleveraging crushed TIPS prices (spiking their yields) while deflation fears crushed breakevens. Real yields above 4% amid a collapsing economy marked the most dislocated moment in TIPS-market history; the yield was back below 2% within a week.
May 10, 2021Peak Financial Repression
−1.91%
The all-time low. Pandemic QE plus rising inflation expectations drove 5-year real yields below −1.9% — safe assets guaranteed a purchasing-power loss of about 2% a year. This was the backdrop to the 2021 rally in everything; its reversal in 2022 came with the bear market.
Sep 14, 2012QE3 / Operation Twist Low
−1.67%
The first great repression era: QE3 launched with 5-year real yields near −1.7%, pushing investors into risk assets. Real yields stayed negative for almost two and a half years (April 2011 to September 2013) — the backdrop to the 2012–14 rise in everything duration-sensitive.
Oct 3, 2023"Higher for Longer" Peak
2.59%
The restrictive-era peak. The Fed's hold at 5.3% and heavy Treasury issuance pushed the 5-year real yield to its highest since 2008. The regional-bank failures of March 2023 had come earlier in the climb, with the real yield at 1.1–1.9%.
Aug 30, 2019Pre-COVID Zero Bound
0.04%
Real yields sat at zero as the Fed cut rates mid-cycle amid trade-war uncertainty — money free in real terms but not yet repressive. A textbook "neutral-easy" reading a few months before the pandemic reset everything.
Jun 1, 2007Pre-Crisis Restrictive Norm
2.58%
The pre-crisis benchmark for genuinely restrictive money: after seventeen consecutive Fed hikes, 5-year real yields held near 2.6%. A recession began seven months later, in January 2008.
Frequently Asked Questions
What exactly is a real yield?
The yield on a Treasury Inflation-Protected Security, whose principal adjusts with CPI. A 5-year TIPS yielding 1.9% pays 1.9% ABOVE realized inflation, whatever inflation turns out to be. The relationship: nominal 5-year yield ≈ real 5-year yield + 5-year breakeven inflation. The real component is the true cost of money; the breakeven component is inflation compensation.
Why do real yields matter more for asset prices than nominal yields?
Because equities, real estate, and commodities are claims on REAL cash flows — their fair value discounts real cash flows at real rates. When real yields fell to −1.9% in 2021, the present value of distant cash flows soared; when real yields rose 3.4 points by late 2022, those same valuations fell. Nominal yields conflate this with inflation compensation, which real cash flows largely hedge.
Why were real yields NEGATIVE for years — who buys a guaranteed real loss?
Institutions that must hold safe assets regardless of return: banks (regulation), pensions and insurers (liability matching), foreign reserve managers, and the Fed itself (QE). From 2011-13 and 2020-22, QE plus a global savings glut pushed real yields deeply negative. That is "financial repression": a policy-engineered transfer from savers to borrowers (including the Treasury) designed to force capital into productive risk.
Was the 4.24% reading in November 2008 really a "tight money" signal?
No — it was a market dislocation, the reason the very-negative band starts at 3.5%. Leveraged funds dumped TIPS into a market with no buyers (spiking real yields) at the same moment deflation panic crushed breakevens. Money was not truly 4% tight; the TIPS market was broken. It is a caution that extreme readings in either direction during crises partly reflect liquidity, not policy.
How are this page's colour levels set?
The colours are set around a goldilocks range rather than in one direction, because real yields do harm at both ends. The goldilocks zone is 0.5% to 1.5%: capital has a real cost, and policy is neither subsidizing bubbles nor squeezing growth. Readings of 0% to 0.5% are positive but low, a normal policy footing, and readings of 1.5% to 2.25% are positive and firm. Readings of −0.75% to 0% are mildly negative, easy money leaning on asset prices, and readings of 2.25% to 2.75% are a meaningfully restrictive stance. Readings of −1.5% to −0.75% are deeply negative, emergency policy, and readings of 2.75% to 3.5% are very high, a squeeze. Below −1.5% is extreme financial repression; above 3.5% is a crisis-grade squeeze or a dislocation of the TIPS market. They are fixed levels, set in July 2026 with the series' whole history in view, and they do not move as new data arrives. A reading above 3.5% gets the same colour in 2008 as today, so a change of colour is a change in real yields, never in the yardstick.