The "Real Yield" is the number you get when you divide nominal yield, 1 + i, by the inflation rate, 1 + π.
In practical terms for an investor, the value of real yield tells you whether or not your current investment is beating Inflation: If real yield, 1 + r, is greater than 1 (positive real yield) then you're beating inflation. Otherwise, you're not
The equation from which real yield is derived is known as the Fisher Effect or the Fisher Equation:
(1 + i) = (1 + r) * (1 + π)
The Fisher Effect is mostly used to describe the relationship between inflation and nominal interest: Nominal interest rates in the general economy adjust in response to the expected future inflation.
Personal theory:
For dollar hegemony, the dollar's status as a world reserve currency hinges on having positive real yield:
r > 0
Otherwise, buying Treasury bonds won't allow foreign countries to beat inflation, and they'll have to dump their dollar reserves elsewhere besides treasuries to beat it.
Effectively this means that the interest rates on treasury bonds must be higher than the inflation rate to secure the US dollar's reserve currency status:
i > π
Some basic cursory research needs to be done on how countries manage their foreign reserves -- how they decided when to dump or go long -- in order to confirm or deny this theory.
It's worth noting that real yield on treasury bonds were negative during 2012 and 2020. https://fred.stlouisfed.org/series/DFII10
Also worth noting that China has been dumping US treasuries (as of 2025) while the UK and Japan continue to accumulate them. threads.com/@global_markets_investor/post/DTshVStDZlP/china-is-still-dumping-us-treasuries-chinas-holdings-of-us-government-bonds