In January, the nominal 10-year Treasury rate was 1.76%, which was down slightly from the previous two months. Also, this was the sixth month in a row the nominal rate was less than 2.00%. At the same time, inflation reached its highest annual rate since October 2018 and kept the real 10-year Treasury below zero for the fifth time in eight months. In January, the real rate was just -0.13%.

In January, the year-over-year change in the real 10-year Treasury rate was -0.44%, which was the 13^th consecutive month the change was negative. 

The low change in the real 10-year Treasury rate tends to be a positive signal for durable goods manufacturing. Changes in the real 10-year Treasury rate tend to lead durable goods new orders and capital equipment consumption by a relatively long period of time – historically, between 12 and 24 months. The change in the 10-year Treasury rate is a good leading indicator of housing permits, construction spending, consumer durable-goods spending, durable goods new orders, and capital equipment spending. A decreasing year-over-year change in the real 10-year Treasury rate should lead to increases in all of these data points down the line.