Inflation Hedge
A bond strategist weighs in on TIPS, which are performing better after a miserable 2022.
Inflation skyrocketed to 9.1% in mid-2022. It has waned considerably since then, thanks in no small part to the Federal Reserve’s aggressive rate-tightening program. Treasury Inflation-Protected Securities, known as TIPS, aim to provide a hedge against inflation. These government-issued bonds, however, struggled in 2022 as bond yields rose sharply, pressuring prices. They are performing better this year as the Fed gets close to finishing its rate hikes — although when that actually will occur is very hard to divine.
For some perspective on TIPS, Income Matters Today spoke this week with Dhruv Nagrath, a fixed-income product strategist at BlackRock’s portfolio management group. The link to the interview is below.
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