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Equity Risk Premium Narrows to Near Zero as Real Yields Surge

The gap between expected stock returns and inflation-protected Treasury yields has shrunk to roughly one percentage point, far below its historical average, as rising real rates make bonds unusually competitive with equities.

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The gap between expected stock returns and inflation-protected Treasury yields has shrunk to roughly one percentage point, far below its historical average, as rising real rates make bonds unusually competitive with equities.

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