Backtesting December 31st 1971 to present seems to disagree with this premise. By 1987 10 year treasury recuperated all losses. For your information BND has average duration of 6 years. Recovery should be much faster.No, unless there was a period of deflation. $1 in 1970 has about the same value as $8 today. Nominal bonds can recover from interest rate increase when interest rates decrease but without deflation, we will never get back the recent unexpected inflation if you owned the bonds prior to inflation going up after the pandemic.Did nominal bonds ever recover from 1970s inflation?Nominal bonds will very likely never recover from the unexpected inflation we had in 2021-2024. If you were the proud owner of BND in 2020, then the money lost to inflation is gone forever, unless we have a period of sustained deflation.
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Statistics: Posted by Blue456 — Sun Jul 28, 2024 2:36 pm — Replies 55 — Views 4251