QUICK DEFINITION
Real Yield is the return on a bond after accounting for inflation, or the market yield on an inflation-protected security when used as an observable proxy.
WHY IT MATTERS
Why Real Yield matters in bond markets
Real yields are central to valuation because they represent the inflation-adjusted cost of capital and discount rate.
MARKET CONTEXT
How to think about it
Bond investors use real yield as part of a wider framework that links prices, yields, cash flows, liquidity and risk. The concept should therefore be read together with its related terms rather than as an isolated definition.
Is Real Yield important for fixed-income investors?
← Back to the Bond Market Glossary Yes. Real yields are central to valuation because they represent the inflation-adjusted cost of capital and discount rate.