TIPS Yield Rise Amid Sticky Inflation Outlook

The 10-year TIPS yield reached 2.23% Tuesday, its highest level since January 2009, according to Dow Jones Market Data. The benchmark is up 0.38 percentage points this month, on pace for the largest monthly yield gain since a year ago. “I think this is one of the reasons why yields continue to move higher,” Spartan’s Peter Cardillo says, linking rising TIPS to the rise in regular Treasury yields. Cardillo says that, while overall inflation is declining, “the auto strike and rising oil prices suggest higher inflation, causing the TIPS to move higher [in] a potential headache for the Fed.”