TMV - Time To Get Real On Inflation-Linked Bonds
It may be time to add exposure to inflation-protected U.S. government bonds ((TIPS)). Why? The Fed has confirmed its intent to be patient with its next rate move and may let inflation temporarily breach its 2% target. Along with a slowing but growing economy, we believe this makes TIPS an attractive alternative to nominal bonds.
Chart of the week
Nominal and "real" yields of 10-year U.S. government bonds, 2010-2019
Past performance is not a reliable indicator of current or future results.
Sources: BlackRock Investment Institute, with data from Bloomberg, March 2019. Notes: Nominal yields