US Treasury feeling pinch of inflation

Author: Nick Bovell | Category: News

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.