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|Subject: TIPS 10 year breakeven rate||Date: 9/27/2012 2:14 PM|
|Author: grier22||Number: 44575 of 44622|
WSJ: Higher Inflation Expectations Could Be Boon
Viewing the Fed this way, many are keen on Treasury Inflation-Protected Securities, or TIPS, a segment of the Treasury bond market whose value increases with higher inflation.
This month, the 10-year breakeven rate--a measure of the yield difference between 10-year Treasury notes and 10-year TIPS--rose to 267 basis points, its highest level since May 2006.
That move, which suggests investors expect the U.S. inflation rate to average 2.67% on an annualized basis over the next decade, reflected concerns that the Fed's newly announced "quantitative easing" stimulus program will accelerate the advance in consumer prices.
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