The nominal yield on a bond is simply the percentage of interest to be paid on the bond periodically.

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Therefore, nominal yield is used only for calculating other measures of return.

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It is important to note that the nominal yield does not estimate return accurately unless the current bond price is the same as its par value.

FORBES: 5 Basic Things To Know About Bonds

Regarding Nominal GDP Growth, the yield of the bonds will likely be greater than that too and will more than likely be greater that the 4% assumption quoted in the article.

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But the increase in yield was just in nominal terms because the YoY change in the CPI jumped from 5.2% in January of 1977 to 14.2% in February of 1980.

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The high yield index certainly yields less in nominal terms than it did around the last two recessions in 2011and late-2007 to mid-2009.

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The use of the Fed to peg nominal interest rates at artificially low levels, fine tune the yield curve, incentivize risk taking, monetize government debt, and inflate selected asset prices by allocating credit are deviations from sound money and free markets.

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