Treasury Real Yield at 16-Month High on Inflation Bet (Update2)


(Bloomberg) -- For the first time since 2007, Treasury investors are betting that inflation will accelerate.The yield on 10-year notes exceeds the consumer price index by 2.72 percentage points, the most since December 2006. The gap between two- and 10-year rates widened at the fastest pace in a year last month as traders demanded more compensation for longer-term debt. Treasury Inflation Protected Securities that signaled falling prices as recently as Nov. 20 show they will increase in the U.S. this year.

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