Treasury Inflation-Protected Securities

UBS maintains a neutral stance on Treasury Inflation-Protected Securities (TIPS), noting that positive real yields and elevated inflation provide a supportive background. While near-term performance has been hindered by falling energy prices and inflation expectations, TIPS remain a useful hedge in stagflationary scenarios.

Key Takeaways

• 1.TIPS are well-suited to the current environment of modest growth and elevated inflation, despite a recent pullback in performance.
• 2.Real yields are now comfortably positive and at near multi-decade highs, making the valuation case for TIPS more appealing.

Table of Contents

• Treasury Inflation-Protected Securities
• CIO View: Treasury Inflation-Protected Securities
• Upside scenario
• Downside scenario
• Global asset class preferences definitions
• Appendix
• Risk Information

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