Long-Term Returns and Risk for Bonds

What Really Happened to U.S. Bond Yields

“…Our estimate of the 10-year bond risk premium may appear high to readers familiar with long-term evidence of very low historical excess returns for bonds (see Ibbotson 1997 andWilson andJones 1997). Remember, however, that we examined a relatively short period and most of it was after the peak of inflation in the early 1980s.…”