Summary
- TIPS yields started and ended the year at relatively high levels, but dipped at midyear.
- TIPS outperformed the overall bond market as inflation expectations rose, increasing demand for TIPS and softening increases in yield.
- Are today’s higher yields a head-fake, or a signal of buying opportunities to come?
Treasury Inflation Protection Securities had a promising beginning of 2016 for investors, then a serious slump in yields at midyear, and then a promising rise in yields again after the November elections.
What can we expect in 2017?
Treasury Inflation-Protected Securities 
This discussion raises in my mind what is the optimal amount of inflation bonds to hold in a diversified bond…