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Hi Guys,

Interesting article; rising interest rates equals real bad news for TIPS.

It's something Vanguard's Volpert knows only too well. He argues that changes in interest rates have eight times more impact than an equivalent rise in inflation expectations. Or more simply, a 1% jump in the real rate of interest would reduce the market value of the bond by 8%. That contrasts with a 1% increase in the CPI, which would result in only a 1% rise in the TIPS principal.

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