As Larry Summers' TIPS Market Turns 21, a Tune-Up May Be Needed
- Program has saved taxpayers $49 billion, Treasury calculates
- Yet analysts suggest tweaking auctions’ frequency, sizes
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The $1.3 trillion U.S. market for inflation-linked debt, the brainchild of former Treasury Secretary Larry Summers, has saved taxpayers billions. Now, as the program prepares to turn 21, it may need a tune-up.
In an assessment released this month, the current stewards of the nation’s finances saw both pros and cons to Treasury Inflation Protected Securities -- known as TIPS -- which debuted in January 1997. On the plus side, the debt has saved about $49 billion relative to sales of regular notes and bonds. Yet Treasury Secretary Steven Mnuchin’s team expressed disappointment that the obligations have failed to attract a more diversified array of investors.