Inflation Is a Terrible Bet in the Case of Linkers Plunging 17%
- Inflation-linked index falls most this year among benchmarks
- Longer average maturities mean debt suffers from rate hikes
In the UK, inflation is at the highest since the early 1980s, when gilt linkers were first issued. In the US, it’s also near a 40-year high, whereas Treasury Inflation-Protected Securities (TIPS) were only introduced in the late 1990s.
Photographer: Chris Ratcliffe/BloombergThis article is for subscribers only.
At a time of roaring inflation, bonds that hedge price pressures sound like a winner. In reality, they’ve been a disaster.
The Global Inflation-Linked Bond Index has plunged 17% in 2022 -- the worst-performing of the 20 key fixed-income benchmarks offered by Bloomberg.