Bonds
Inflation-Linked Treasuries Face Key Test After Bruising Month
- Inflation-adjusted Treasuries have erased most of 2023 gains
- Real yields near highest since 2011 before 30-year auction
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The market for Treasury Inflation-Protected Securities is teaching investors a harsh lesson about interest-rate risk, ramping up the focus on this week’s auction of the debt.
Despite sticky price pressures, long-maturity TIPS are on track for their biggest monthly loss this year. Investors have driven up yields on all manner of long-dated bonds this month amid concern over the Treasury’s swelling borrowing needs and — ironically for TIPS — the risk that inflation may spike again or not decline smoothly.