Ahead of Wednesday's Consumer Price Index release, the article says inflation remains a problem, with the headline CPI expected to reach 3.6% in September partly due to energy costs tied to the war with Iran. TIPS have lost value this year, with the iShares TIPS Bond ETF down 1.16% year-to-date, as rising real yields rather than inflation expectations pushed prices lower. The 10-year TIPS yield of 2.87% is the highest since November 2008, and UBS's Jason Draho says TIPS are 'getting interesting,' though longer maturities carry heavy rate risk. PIMCO's Greg Sharenow favors short-term TIPS, while BlackRock's Rick Rieder suggests combining income, equities, commodities and alternative assets. The New York Fed's one-year inflation expectation rose to 3.9%, its highest since May 2023.
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