In response to interest from investors, the Treasury said it will also consider issuing more inflation-protected securities, known as TIPS. The value of those securities is designed to match any increases in the consumer price index.
The department might add two additional auctions of 10-year TIPS, a Treasury official said, bringing the number of 10-year auctions to six. Treasury already plans to hold two auctions of five-year TIPS and two of 30-year TIPS.
If I am understaning this correctly, this is equivilent to the goverment taking out variable interest loans. I don’t see how this can be a good thing, especially on 10 and 30 year notes. The only reason I can imagine they even offer these would be they can’t fund the deficit through fixed notes.
I know the government’s budget is already unsastainable and we are digging our own grave but these just seem to put the nails in the coffin.
Anyone know more about these? Am I just overreacting here? :ohnoes:
I know that it is one of the choices for the Citigroup 401k plan. There are about 100 different investment choices.
It is up about 11 points this year so far, when most of my other investments are about even or down a point…
I did not invest in it…
Investment Strategy
The investment seeks a long-term income return, currently about 3% over the inflation rate, by investing in a portfolio of Treasury inflation-indexed securities. The Fund is for investors seeking a real rate of return over and above inflation over the long term, and for investors who seek diversification.
Category Description
Inflation-protected bond portfolios primarily invest in fixed-income securities that increase coupon and/or principal payments at the rate of inflation. These bonds can be issued by any organization, but the U.S. Treasury is currently the largest issuer of these types of securities. Most of these portfolios buy bonds with intermediate- to long-term maturities.
You’re overreacting a bit…since you like tight money youshould be happy, the treasury issuing more of these gives them more incentive to hold down inflation.