Your Money
This year, inflation was reported at a 40-year high, posting a much stronger-than-expected rise. But inflation-protected bond funds racked up losses, extending declines posted since the start of the year. What gives?
In a nutshell, investors are getting a lesson in the dynamics of the Treasury Inflation-Protected Securities market. Just because inflation is high and rising doesn’t mean that a TIPS fund will be making money. It can easily be the opposite. Often what matters more is what is expected to happen with inflation in the months, quarters, and years ahead.
Why Are Inflation-Protected Bond Funds Losing Money?
by Tom Lauricella
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