Long-Term TIPS Gain Appeal As Real Yields Hit Multi-Decade Highs
Inflation has remained above the Federals reserve's 2% target for 65 consecutive months, while real yields on long duration Treasury Inflation Protected Securities have climbed to their highest level since the securities were introduced 16 years ago. That combination has created a rate environment in which long-term TIPS offer historically high inflation-adjusted income as well as the potential for sizable price gains if real yields revert toward long-term averages.