TIP - TIP: Not The Time To Be Contrarian About Inflation

• History shows, both in the U.S. and overseas, that periods of high inflation tend to stick around for a while due to the self-reinforcing behavior of consumers.
• Treasury Inflation Protected Securities continue to offer a superior alternative to cash and bonds as the risk of continued elevated inflation rises.
• The TIP ETF tracks the performance of U.S. Treasury inflation-protected securities with a weighted average maturity of 8 years, making it sensitive to a potential rise in yields.
• However, the inversion of the yield curve has a strong track record of predicting economic slowdowns and subsequent rate cuts, and given the elevated levels of debt in the economy, we should expect to see cracks appear sooner rather than later.

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