TIPS indicate annual inflation expectations above 3% for next 5-10 years

In “Look to TIPS, Not Fed, for Inflation Tips“, the WSJ describes how current trading in Treasury Inflation-Protected Securities (TIPS) indicates inflation expectations running above 3% per year for the next 3-5 years. The WSJ uses the Fed’s “5yr5yr breakeven” method.

Full disclosure: long iShares Barclays TIPS Bond Fund (TIP)

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One Comment on “TIPS indicate annual inflation expectations above 3% for next 5-10 years”

  1. […] levels of inflation and were far out-performing Treasurys (see here for example). In late January, TIPS imputed an inflation expectation above 3% over the next 5-10 years. Finally, in March, we wondered whether TIPS were then sginaling lower inflation […]


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