Definition
The yield on 10-year Treasury Inflation-Protected Securities — the "true" cost of borrowing after adjusting for expected inflation.
Real yields are arguably the single most important variable for equity and crypto valuations. Higher real yields increase discount rates, compressing the present value of future cash flows. When real yields rose from -1.0% to +2.5% in 2022-2023, BTC fell 77% and the Nasdaq dropped 35%. Our model gives real yield a 10% weight.