Expectations of lower inflation have probably played only a minor role in the fall in Treasury inflation compensation – the gap between the nominal yields of conventional Treasuries and the real yields of Treasury Inflation Protected Securities (TIPS) – since the slide in oil prices began. A larger drop in the term premiums of conventional Treasuries than in those of TIPS has probably played the major role.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.