Monday, November 17, 2008

Negative Inflation Adjusted Yeild Curve

When the TIP price is below one hundred, the inflation adjusted yield curve is negative.  


3 comments:

Anonymous said...

why if TIP price < 100, inflation adjusted curve is negative?

Jack Miller said...

No. The TIP fund trades based on the net asset value of scores of different bonds of various maturities.

You can plot the yield curve by going to the St. Louis Fed site. The inverted yield is that the TIPS with short maturities yield much more than the TIPS with long maturities.

Send me an email to jack.miller@gmail.com if you want to discuss.

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