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The real interest rate is calculated as the difference between the nominal interest rate and the inflation rate. The chart above displays the **nominal interest rate** of a 1-year US Treasury bond, the US **inflation rate**, and the resulting one-year **real interest rate**.
Inflation is defined as the yearly percentage change of the Consumer Price Index (CPI). When inflation is high, prices for goods and services rise and thus the purchasing power per unit of currency decreases.
The chart shows that, adjusted for inflation, the yields on US Treasuries (blue line) have often been negative.

- Nominal interest rate
- Robert Shiller Online Data: Nominal One-Year interest rate - from 1871 until 1929
- Capital Markets Data: Nominal One-Year interest rate - from 1929 until 1990
- Quandl: Constant Maturity Treasury Rate since 1990
- Inflation
- Robert Shiller Online Data: CPI from 1871 until 1913
- Federal Reserve Bank of St. Louis: CPI since 1913

- Investopedia: What is a Real Interest Rate?
- Investopedia: What is Inflation?
- Longtermtrends: M2 Money Supply vs. Inflation
- Longtermtrends: US Treasury Yield Curve
- Longtermtrends: Bond Yield Spreads