VTIP: As Yields Sink, Consider Adding Inflation Protection

Summary

  • The Federal Reserve looks likely to begin cutting short-term rates in 2019, possibly as much as 75 basis points over the next year.
  • Yields for money market funds and short-term Treasurys will track lower with those rate cuts.
  • Inflation-protected investments could perform well in a time of falling rates and steady moderate inflation.

The “glorious” days of getting a 2% return on a very safe, very liquid investment are drawing to a close. Why? The Federal Reserve is on the brink of beginning a series of cuts to its Federal Funds rate, the nation’s key short-term interest rate.

Read my full analysis on SeekingAlpha.com

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About Tipswatch

Author of Tipswatch.com blog, David Enna is a long-time journalist based in Charlotte, N.C. A past winner of two Society of American Business Editors and Writers awards, he has written on real estate and home finance, and was a founding editor of The Charlotte Observer's website.
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