, pub-7745120518280631, DIRECT, f08c47fec0942fa0
The Inflation Beat
Q & A
Inflation Forecasting Methodologies
Short-Term Fixed Income Sources and Methodology
Short-Term Fixed Income data comes from The St. Louis Federal Reserve Bank's Economic Research website known as FRED .

Inflation tends to not be so volitile within a period of a year.  Prices do tend to be "sticky" in that regard.

With that said, I'm going to use the year over year rate of inflation at the metric rate to compare the annualized rates of the 1, 3, 6 and 12 month treasury yield.

The treasury market for these maturities is very large and poses as a good metric for short term yields on highly liquid and low risk short term assets.

Do the the nature of the liquidity and considerably less risk to any loss of capital, rates on short term fixed income will tend to be the low yeilding.

Under good conditions, the yields can still provide a return over the rate of inflation, although this is becoming more and more rare in recent history.

Below is a chart comparing the 1 year treasury yield Vs. the annaul rate of inflation. 

As long as the yield on the 1 year treasury (blue line) is higher than the rate of inflation (red line), then the 1 year treasury bill beats the rate of inflation.

For a better perspective, I'll create a chart showing the rate of the 1 year treasury minus inflation to see if it was positive return or negative.
From this chart, one could see that over the past 20 years now, the 1 year treasury bill has been in the majority of time negative yielding Vs. the rate of inflation.  

The 1 year treasury bill rate is greatly influenced by the Federal Reserve Bank's Fed Funds Rate which is set by the Fed.

This very same methodology goes for the 1, 3 and 6 month treasury bills as well.
Back To Homepage