No. of Recommendations: 1
You might be able to play in TIPs here too. I'd think TIPs would catch a bid here, as inflation worries rise. Unfortunately, I think the problem in TIPs is oil. Since TIPs are based on total CPI, its possible that core inflation rises because the Fed is supplying too much money, and yet oil prices come off their all-time highs, resulting in total CPI which isn't any higher. So I'd avoid TIPs, especially if you are a long-term investor.

I have no idea what good trading plays are, but this shows a poot understanding of TIPS for a long term investor. Oil prices should come down soon, temporarily. Oil price reflect both supply and demand and momentum trading. But over the long term, supply and demand will continue to push oil up, probably at a considerably higher rate than CPI_U, as currently measured.

Inflation being factored into 5 and 10 year TIPS is now low (2%, 2.35%, and that's up a bit). 10 year TIPS are currently at about 40-45 basis points below historical median and mean for 10-year Treasuries above inflation. Of intermediate or long term options, they look pretty good (for "safe" options). I chose a 5.25% 5-year CD, but there won't be a 10-year TIPS auction for another few weeks. They are certainly the better choice compared to 5 or 10-year Treasuries.
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