The yield on the benchmark 10-year Treasury bill reached a new low for the year yesterday, falling three basis points to 3.04 percent. Since yields move in the opposite direction of prices, this is not necessarily a bad sign for Treasurys, whose prices are rising as more people want to buy them. What it means, though, is that trouble signs in the economy have sent more investors to the safe haven of the Treasury bond.
But there was another milestone reached by the Treasury bond. It's possible to figure the true return of the Treasury bond by subtracting out the inflation rate; the resulting figure will give you the actual, inflation-adjusted growth of your assets. The way Reuters financial reporter Scotty Barber does it, he rate doesn't even subtract out the overall inflation rate, but simply the core inflation rate, which omits volatile gas and food prices.
Even using that, the lowest possible inflation rate, Reuters estimates that the 10-year Treasury is now returning exactly zero. If you buy a 10-year Treasury bond today, in other words, and inflation stays right where it is, in 10 years your purchasing power won't have grown an inch.