Treasury inflation-protected securities
- Treasury inflation-protected securities
Treasury inflation-protected securities ( TIPS)
Securities issued by the U.S. Treasury that provide inflation protection to investors. These securities have a fixed coupon rate and maturity date. However the interest payment is based on a principal amount that is adjusted semiannually to reflect changes in the consumer price index ( CPI). American Banker Glossary
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First issued by the U.S. Treasury in 1997, these Treasury bonds attempt to protect investors against fluctuations in inflation by linking the principal amount to the consumer price index. Each year, the principal is adjusted by the inflation rate during the previous year. The index for measuring the inflation rate is the non-seasonally adjusted U.S. City Average All Items consumer price index for All Urban Consumers (CPI-U), published monthly by the Bureau of Labor Statistics ( BLS). These bonds are taxable. Indeed, one must pay tax on both the interest and the increase in principal. TIPS are one of two types of inflation-indexed securities sold by the U.S. Treasury; the other type is Series I Savings Bonds . Bloomberg Financial Dictionary
Financial and business terms.
2012.
Look at other dictionaries:
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TIPS — Treasury inflation protected securities (TIPS) Securities issued by the U.S. Treasury that provide inflation protection to investors. These securities have a fixed coupon rate and maturity date. However the interest payment is based on a… … Financial and business terms
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