Episode Summary Conventional bonds promise fixed dollars, but they completely ignore the silent risk of inflation. If inflation runs hot, a bondholder can receive every promised payment on schedule and still end up poorer in terms of actual purchasing power. This episode explores Real Return Bonds (RRBs)—financial instruments designed to solve this specific risk by tying your return directly to the rate of inflation. We also break down how to read the market's implied inflation expectations simply by subtracting one yield from another.

Key Concepts

• Nominal vs. Real Yields: A nominal yield is your total return expressed in raw dollars, whereas a real yield measures your return in actual purchasing power. A nominal yield is essentially a real yield plus a built-in  ...