Taps Coogan – May 24th, 2022

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For those keeping track, the yield on the 10-year TIPs (inflation protected treasury) has traded into meaningfully positive territory and stayed there since the start of the May – the first return to positive real benchmark yields since the initial outbreak of Covid in 2020.

When this happened in post-Global Financial Crisis in 2013, it was one of the early indicators that that era’s commodity bull market was ending despite several subsequent years of highly accommodative monetary policy. This time, major resource producers are maintaining much stricter capital investment plans, instead focusing on deleveraging and shareholder returns in hope of a more durable bull market.

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