📝 Real Yields Likely Need to Press Higher: Goldman Sachs

We do continue to see a compelling case for real yield short given the composition of yields and market-implied inflation path. Despite significant hike pricing and real yields leading the broader year-to-date nominal selloff, traded inflation has continued to drift higher across the forward curve, with 10y breakevens exceeding 3% for the first time since TIPS were introduced. Absent an exogenous shock, resilient inflation pricing that implies an above Fed-target path out the forward curve means that real yields likely need to press higher. - Goldman Sachs Interest Rates Strategy