The Real Yield: June 2007 Update

This past week saw the June 2007 CPI numbers released:

The consumer price index rose 0.2% in June, the Labor Department said Wednesday, down from May’s 0.7% rise. The core CPI, which excludes volatile food and energy prices, advanced 0.2%, up from the previous month’s 0.1% increase.
Unrounded, the CPI rose 0.191% last month. The core CPI advanced 0.232% unrounded.
The data were broadly in line with Wall Street forecasts. The median forecast of 24 economists surveyed by Dow Jones Newswires was for a 0.1% CPI increase and 0.2% core rise.
Overall consumer inflation was up 2.7% from a year ago. The core CPI, in contrast, was up 2.2% compared to a year ago, unchanged from May’s yearly rate. Over the past three months, the core CPI has grown at a 2.3% annualized rate. — Dow Jones

Real Yield on the 10-Year T Note

With the June figure out, let’s update the charts from last month.
Real 10-Year T-Note yield since 2005

Real 10-Year T-Note yield since 2005

Real 10-Year T-Note yield since 2000
Real 10-Year T-Note yield since 2000

Real 10-Year T-Note yield since 1962
Real 10-Year T-Note yield since 1962

Consumer Price Index vs. 10-Year Yield since 1962
Nominal 10-Year T-Note yield vs. CPI-U since 1962

How to: Subtract the 12-month change in the consumer price index from the nominal CBOE 10-year Treasury Note yield ($TNX), and presto, we have a back-of-the-envelope calculation of the real 10-year yield.
We use the CPI-U: all urban consumers, all items, including food and energy, non-seasonally adjusted, 1982-1984=100. Series ID: CUUR0000SA0