US Treasury feeling pinch of inflation
Despite the lacklustre inflation picture which is causing concern for the Fed, the Treasury is paying much higher interest payments than in 2016.
The US Treasury paid out $25b more in interest payments through July compared to the same period in fiscal 2016 due to the inflation-indexed securities program.
The value of Treasury Inflation-Protected Securities (TIPS) fluctuates with inflation, measured by CPI. The security provides an inflation-hedged investment.
The next US CPI reading is due out tomorrow at 8:30am EST.