Government committee recommends death to 5-year TIPS
Thursday, September 11th, 2008
Categorized as: TIPS
The Treasury Borrowing Advisory committee has recommended that the Treasury stop issuing 5-year TIPS, according to a recent article on Bloomberg. The group says TIPS have cost the government an extra $30 billion in interest because they pay more than traditional government securities.
On the other hand, a TIPS defender “estimates that TIPS have saved the U.S. $275 billion since 1997 by lowering yields on regular Treasuries by 0.25 percentage point to 0.5 percentage point.”