Investors Forgo Inflation Protection as U.S. CPI Slows: Chart

(Bloomberg) -- Among the headwinds for Thursday’s 30-year Treasury Inflation-Protected Securities auction was persistent outflows from exchange-traded funds that hold them. The cumulative monthly outflow of nearly $750 million is the biggest since 2013, Bank of Montreal analyst Ben Jeffery said in a note, and the largest fund, iShares TIPS Bond ETF, has seen its share count drop to the lowest level in a year. Consumer Price Index data for September cast doubt on “the fabled late cycle inflation pickup, which erodes some of the fundamental value of inflation protection,” Jeffery wrote.

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