Source: Bloomberg
Source: Bloomberg
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Fed expectations don’t explain all the move in TIPS

Yields for TIPS, the market's favored end-of-the-world hedge, have been much more volatile than expectations about the Fed.

March 1, 2017 9:16 PM (UTC+8)

The yield dip in the market’s favored end-of-the-world hedge was much more pronounced than the expected federal funds rate (from the year-ahead futures price) indicated, and the bounce-back in TIPS yields was correspondingly higher. TIPS yields (reflecting the cost of out-of-the-money protection against extremes of inflation and deflation) have been much more volatile than expectations about the Fed.

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