10-Year Yield Minus Inflation Screams Depression

Deeply negative real yields are associated with massive recessions and bear markets.

What is the "terminal" inflation rate and what is the "terminal" yield on the 10-year bond for this bear market? Very few people are contemplating a world were the real yield is 0 percent, but inflation is 5 percent, thus the 10-year is at 5 percent. Also, consider what any elevated yield on the 10-year means for stocks. Leave aside that margins and inflation will probably curtail dividend growth at the outset of inflation and possibly until stocks such as Exxon come to dominate the index again. The S&P 500 had a 2-percent yield in the QE era. To get the yield back to 2 percent now would require a decline to 2700.