, pub-7745120518280631, DIRECT, f08c47fec0942fa0
The Inflation Beat
Q & A
Inflation Forecasting Methodologies
Long-Term Fixed Income Methodologies and Sources
The source of data for the yield at the time of purchase comes from The St. Louis Federal Reserve Bank's Economic Research website known as FRED.

For longer term paper, called Notes or Bonds, I assume the investor bought them at the beginning of the time period of comparison.  Interest rates are compounded and assumed held to maturity.

For example, if I'm comparing the 5 year high quality corporate bond to the rate of inflation to determine if it was beat or lost, I'll need to know what the yield was at the time of purchase. 

Taking this chart from FRED, you can see what the bond was yielding at the time of purchase. Assuming no fees and interest compounds, we can determine the final return if held to maturity and compare that to the compounded rate of inflation over the same time period to determine if it beat inflation or not.

Here is a chart of the 2 year Treasury note which also comes from FRED.  
Having a successful investment in fixed income depends on what the yield is and how much inflation becomes there after.  Thus, you'd want to buy longer term paper at a higher yield when you believe inflation is heading lower.  

Back To Homepage