After underperforming for two consecutive quarters, TIPS posted a small gain of 0.5% in the 2019 fourth quarter, significantly outperforming comparable maturity straight Treasurys, which posted a decline of 1.4%.
That performance mirrored the trend in the equity markets, which bounced back first on the rumors and then on the news of a Phase 1 trade deal with China. Equity markets had essentially traded sideways with two modest corrections from the beginning of May to the end of September, but they took off in October on rumors of a pending trade deal.
At the same