Attention Economy


Friday, February 14, 2025

Two Different Views on the Attractiveness of TIPS

Inflation Isn’t Going Away? Some Tips on How to Buy TIPS
https://www.wsj.com/finance/investing/inflation-tips-on-how-to-buy-tips-632c8462
Inflation-protected securities are offering close to their best yields in more than a decade. Buying them has never been easier.
 
Lies, Damned Lies and Trumpflation
https://paulkrugman.substack.com/p/lies-damned-lies-and-trumpflation
Paul Krugman’s Take:
Which brings me to TIPS. These are U.S. government bonds whose future repayments are indexed to the Consumer Price Index, just like Social Security checks. So TIPS protect investors against future inflation, which can erode the purchasing power of ordinary bonds.
But let’s be more precise here: TIPS protect you against future inflation that the U.S. government admits is happening. That has never been an issue in the past, because despite claims from right-wing conspiracy theorists, America has never cooked its economic books.