Summary
- The TIP ETF has lost more than 6% of its value in a few days, and is falling sharply again this morning.
- A key reason is that inflation expectations are plummeting, causing the TIP ETF price to fall versus the overall bond market.
- The market is pricing in a severe recession. But individual TIPS are a much better investment than nominal Treasurys. And TIP funds and ETFs are looking more attractive.
Investors in the TIP ETF – an index fund that holds the full range of Treasury Inflation-Protected Securities – got a big surprise this week: a stunning 6.2% drop in value amid a what appeared major “safe haven” Treasury rally.
Why did that happen?

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