Investors have been dumping U.S. inflation-protected bonds at the fastest pace since the 2008 financial crisis, as inflation fears cool off.
Amid a broad selloff in most bond markets, investors pulled $7.3 billion of cash from funds that invest in Treasury inflation-protected securities, or TIPS, in the second quarter through June 26, surpassing the previous record quarterly outflow of $3.6 billion investors pulled out during the fourth quarter of 2008, according to the latest data from fund tracker Lipper.
Prices of inflation-protected securities also fell sharply in recent weeks.
TIPS have been one of the most popular tools for investors to hedge against rising prices because their value rises along with higher inflation. Investors had worried the Federal Reserve’s aggressive monetary stimulus for the economy would spark runaway price increases.
The pullback is also a blow to the U.S. Treasury, which had ramped up its sales of TIPS in recent years to borrow at ultracheap levels to help fund U.S. spending.
Source: WSJ
Source: WSJ
