Inflation-indexed securities

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Inflation-indexed securities

Securities such as bonds or notes that guarantee a return higher than the rate of inflation if the security is held to maturity.

Inflation-Indexed Securities

A bond or other fixed-rate security with an interest rate that varies according to inflation. An inflation-indexed bond, for example, may pay a fixed coupon plus an additional coupon with the amount adjusted every so often according to some inflation indicator, such as the Consumer Price Index. If these securities are held to maturity, then the investor guarantees that the return will exceed the rate of inflation. Inflation-indexed securities exist to provide a low-risk investment vehicle in which the return is guaranteed not to fall below the rate of inflation. See also: I Bond.
References in periodicals archive ?
Market participants and financial economists have long argued that the market for TIPS is not as liquid as the market for nominal Treasury bonds, especially in their early years, when arguably inflation-indexed bonds were not as well established and were not as well understood an asset class as they are today, and during the financial crisis of 2008-2009.
When paired with an inflation-indexed income option, the SGO[TM] offers consumers a powerful income solution that meets today's economic challenges.
The topics discussed include rediscovering the macroeconomic roots of financial stability policy, inflation-indexed bonds and the expectations hypothesis, the economics of credit default swaps, equilibrium in the initial public offering market, and carry trade and momentum in currency markets.
One is the spread between nominal Treasuries and inflation-indexed Treasuries, and the other is inflation swap rates.
3m in inflation-indexed 25-year bonds at a yield of 3.
It was a rare case that gave the diehard advocates of the inflation-indexed wage adjustment mechanism (ATA) a bitter taste of their own medicine: salaries subject to ATA suffered a decrease (albeit a bearably noticeable one) rather than the typical increase imperceptibly enjoyed for the last 26 years.
In the second paper, John Campbell, Robert Shiller, and Luis Viceira present a thorough accounting of what has been learned from the first quarter-century of experience with inflation-indexed bonds in the United Kingdom and the first decade of experience in the United States.
Inflation-indexed bonds TIPS (Treasury Inflation-Protected Securities) are designed to protect investors from inflation, says Kathy Williams, who has a financial services firm in Oklahoma City.
Thursday's trading in the newest 10-year inflation-indexed Japanese government bond issue indicated that most bond market participants project Japan's annual inflation rate at 0.
Oregon's inflation-indexed minimum wage - second-highest in the nation behind Washington's - is intended to help low-income workers keep pace with the steadily increasing costs of essentials such as fuel, food and health care.
The domestic market is more mature and it is deeper, and currently UF rates are attractive for financing in the domestic currency," says Ureta, referring to the Unidad de Fomento (UF), Chile's inflation-indexed currency unit, which is used for project financing.
5 percent, but there is an inflation risk associated with holding this bond that does not exist with an inflation-indexed security such as TIPS.