SPIP - Transitory-Ness In The TIPS Market

• With all the debate about the persistence of inflation, one natural thing to ask is: what is the market pricing?
• The “breakeven inflation rate” on an inflation-indexed bond (in this case, U.S. TIPS) is that future rate of inflation that gives the same total return as nominal government bonds (conventional Treasuries).
• One of the interesting things about fixed income is that outsiders insist that bond market participants routinely misprice bonds while within the bond market there are entire teams whose entire day job is to price bonds correctly.

For further details see: