TIPS Tumble After Unexpected Decline in U.S. Consumer Prices
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Treasury Inflation Protected Securities plunged after a government report showed U.S. consumer prices unexpectedly declined in April.
Demand for TIPS, which are designed to protect investors against rising prices, weakened as the outlook turned from inflation to deflation. The difference in yields between 10-year TIPS and nominal Treasuries, a gauge of trader expectations for consumer prices over the life of the securities, contracted for a fifth straight day.