Real yields at 2001 levels

Econbrowser, an excellent blog for the econ geek, has a piece out today showing that real interest rates in the U.S. are at 2001 levels, using various measures of real interest rates.

Dr. Chinn opines that the rise in real rates makes it hard to argue that the savings glut is keeping rates low. Of course, its possible that rates would be even higher if not for the heavy foreign savings. Anyway, food for thought.

As I've said in the past, foreign buying isn't going to reverse or even stop real soon. It may well slow down, but the result would likely be a slow move higher in rates. So slow, in fact, that no one would notice. We'd also start seeing pressure on corporate and MBS spreads.