TIPS doesn't show true inflation rate, critics say

07/7/2008 | Bloomberg

U.S. inflation-indexed bonds are underperforming because Washington isn't accurately capturing the country's true price rises, critics said. Morgan Stanley and FTN Financial, a unit of Tennessee's largest bank, are urging clients to limit holdings of Treasury Inflation Protected Securities. TIPS are tied to the consumer-price index, which some investors say undervalues the dramatic rise in food and fuel costs.

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