The Fed believes policy is restrictive given the high level of real rates. While one can make that case at the short-end of the curve, it’s a much tougher sell further out. Using core PCE inflation as our deflator, the current level of 10-yr realised real rates is 170bp. Only in the post-GFC period can this be considered high. Indeed, the average for this real rate between 1990 and 2007 is more than double that at 350bp (it’s the same between 1971 and 2007). Even if core PCE falls back to 2.0%, at current 10-yr yield levels, real rates will be 100bp below the pre-GFC average. With QE not currently on the horizon and issuance increasing, is the post-GFC world the norm?