TIPS - As inflation expectations ramp up TIPS remain a good hedge: Alpha Tactics

Real interest rates, or rates adjusted for inflation, hit another milestone this week.The yield on the 10-year Treasury Inflation-Protected Security ((TIPS)) fell to -1% for the first time Friday before settling at 0.99%.The appetite for these bonds has pushed the yield below the previous record of -0.84% hit at the end of 2012, when the Federal Reserve announced its open-ended bond-buying program, or QE3, during the financial crisis.But as much as the rally in TIPS has pushed yields further down into record territory, the expectations for price increases could mean further upside.Inflation expectations hit 19-month highs this past week, with the 10-year breakeven rate close to 1.9%. That’s around the rebound levels where the economy broke out of recession after the financial crisis in 2009.Heading into April 2021, “we’re going to hit inflation that perhaps comes as close as 3% with upside,” says Frances Donald, Manulife Investment Management’s head of

For further details see:

As inflation expectations ramp up, TIPS remain a good hedge: Alpha Tactics