These bonds can stand up to any inflation spike from budget battles and tax cuts

Mark Hulbert

Heightened market volatility creates a window for TIPS

Published: May 23, 2025 at 8:05 a.m. ET

Treasury Inflation Protected Securities (TIPS) are a good bet to beat nominal (non-inflation-protected) U.S. Treasurys if inflation expectations worsen more than they have already.

The investment implication is that TIPS traders should pay close attention to factors that could impact expected inflation. The list of such factors is long, including whether the trade war escalates, how much the bill the House of Representatives just passed increases the federal debt, the impact of Moody’s lowering the U.S. credit rating and whether foreign central banks will sell some of their U.S. debt or exchange their U.S. dollar DX00 holdings for other currencies.