Inflation is rising, but your bank is paying you less. There’s a better option.
The Fed has cut rates six times since September 2024, pulling CD and deposit rates down with it, even as inflation climbs. TIPS offer a compelling alternative, but not all are created equal. Learn which factors determine the right TIPS for your portfolio and how the current “real yield” environment could deliver total returns near 5% if inflation holds at 3%.
Inflation is up, but bank deposit rates and CD rates have declined since September 2024. Why? The Federal Reserve has reduced the Fed Funds rate 6 times to the current target near 3.5%.
A good option is with TIPS – Treasury Inflation Protected Securities. But do not invest in just any TIP. The right TIP depends on several factors. The right TIP will lock in a return above inflation and provide needed diversification benefits. The “real yield” for TIPS remains at its highest level over the past 10 years.
And if inflation averages 3.0% annually going forward, the total return for a TIP may be near 5.0% based on present prices. Rates AND inflation change… so do opportunities.
