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Subject:  TIPS 10 year breakeven rate Date:  9/27/2012  2:14 PM
Author:  grier22 Number:  44575 of 44593

WSJ: Higher Inflation Expectations Could Be Boon

snip

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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