Real 10-Year Treasury Rate Lowest Since January 2015

(Positive) The real 10-year treasury rate was 0.58 percent in April, which was the fourth straight month of decrease. It was the lowest the rate has been since January 2015. The nominal rate was 2.30 percent, which was the lowest it has been since November 2016. The rate of inflation was above 2.0 percent for the fifth consecutive month. Inflation, which has been notably in 2017 than 2016, is limiting keeping the real 10-year treasury rate low. 

The year-over-year change in the real rate decreased for the second month in a row to -71 basis points. That ended four straight months of an increase. The year-over-year change in the real rate has not moved much the last five months.

The 10-year treasury rate is good leading indicator of the money supply, housing permits, consutrction spending, and consumer durable goods spending. A falling real interest rate should lead to more housing permits, construction spending, and consumer durable goods spending. This means that the real 10-year treasury rate is now a negative leading indicator for capital spending.