TIPS Yielding Above 2% Put Inflation Protection Back on Solid Ground

Inflation hedges are finally pulling their weight again. Treasury Inflation-Protected Securities (TIPS) are regaining attention, with real yields on longer maturities at or above 2%, among the most attractive levels in roughly two decades. This comes as March CPI surged to nearly 40% above February, driven by rising oil prices that have pushed purchasing power back into focus.

• Vanguard manages ~$94B in TIPS, and head of US Treasurys John Madziyire says the market offers “incredible value” and remains highly attractive.
• Investors can access TIPS directly via the US government, brokers, or low-cost funds and ETFs from firms like Fidelity, iShares, Schwab, and Vanguard, often with fees of 0.2% or less.

Worth the trust: Some investors worry that rising government debt or distorted CPI data could undermine TIPS. However, John Madziyire pushed back, pointing to the US’s credible central bank, institutional checks, and rule of law as reasons to trust the data. For investors seeking simple inflation protection, a TIPS ladder or a target-maturity ETF from iShares can offer a practical option — especially for those nearing retirement.