this is more a question about bonds in general than just Treasuries, but we will use Treasuries for example
Let say you have $10,000,000 and you buy 30-year Treasury bonds currently yielding 3% annually. If I understand this correctly, then every year that account will receive $300,000 dollars. Simply letting this accumulate over 30 years and the account will grow by $9,000,000. ($300,000 x 30) before receiving the original principle of $10,000,000 back.
The risk being that this might not keep up with inflation over 30 years.
Would this risk be mitigated if the $300,000 was reinvested into new Treasury Bonds at the then current interest rate - regardless of if the new interest rate is higher or lower than the initial treasury purchase?
Please explain thank you