TIPS Wipeout Signals Fed Losing Fight Against Disinflation - Bloomberg
Bond investors are signaling they expect the Federal Reserve
to lose its battle against disinflation, even after inundating the U.S.
economy with more than $3 trillion in the past five years.
While
central banks around the world are trying to spur demand and boost
prices, signs are emerging that a slowdown in inflation is becoming
entrenched. Treasury Inflation-Protected Securities are suffering
unprecedented losses after consumer prices in the U.S. rose 1 percent
last month, the smallest increase since 2009. Known as TIPS, the bonds
have plunged 8.8 percent this year, the most since they were introduced
in 1997, according to Bank of America Merrill Lynch indexes.
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