Recent rise in bond yields might offer decent real returns

Despite the Fed’s continued ZIRP (zero-interest rate policy) US government bond yields have recently shot up across the curve (see below). A 28-year US Treasury STRIP (zero coupon) can be bought at 24.30%, yielding 5.09%. With inflation to remain subdued due to constrained consumer spending real return on such an investment might be as high as 3-4% (assuming inflation of 1-2%). Not amazing, but probably beating stocks handily over the next 10 years.