Bloomberg Surveillance · Wednesday, July 29, 2026
Real 30-year yields have reached new highs, indicating that the market is nervous about the Federal Reserve's ability to contain inflation over the long term. This suggests a belief that 'r-star' (the neutral rate of interest) may be higher than previously thought.
“I think that the Chair has really established himself as a credible inflation fighter, or at least not a clear dove because of who's in the White House at the moment. That was his first meeting. He reiterated that at the semi annual Congressional testimony. And now the question is, if we really believe that the Fed is going to contain inflation over time, you don't want to buy thirty year inflation protection, which is why real thirty year yields are as high as they are.”
“I think it's a clear indication that there are a lot of reasons to be nervous about whether it is I hire our star making a local policy bond.”