2024-04-15 23:30:30 ET
Summary
- TIPs are treasury-inflation protected securities.
- TIPs yield around 2.5% plus inflation and are expected to outperform normal treasuries with inflation rates higher than 2.4%.
- With inflation running at +3.0%, and no signs of going lower, TIPs seem stronger than more traditional treasuries right now.
In keeping with my continued coverage on bonds and bond funds, thought to have a quick look at treasury-inflation protected securities, or TIPs. These securities have broadly similar characteristics to normal treasuries, with effectively zero credit risk, moderate rate risk, and reasonably good yields, albeit below-average. Unlike normal treasuries, TIPs are somewhat protected against inflation, seeing higher coupons when inflation increase, and vice versa....
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With Breakevens At 2.4%, TIP Looks Better Than Treasuries