from Bloomberg:
Bond investors are earning more than ever with Treasury Inflation Protected Securities as central bankers around the world set the stage for a rise in consumer prices by deploying unprecedented amounts of money to battle the global recession.
In March, TIPS earned 6.1 percent, the best returns since the Treasury started selling the securities in 1997, according to Merrill Lynch & Co. index data. Worldwide, inflation- protected bonds had the second best month in at least a decade, rising 4.3 percent including reinvested interest, the data show.
At BlackRock Inc., Vanguard Group Inc., Pacific Investment Management Co. and Pictet & Cie Banquiers, concerns are growing that policy makers will struggle to control inflation once economies start to recover. The Federal Reserve, Bank of England and European Central Bank have increased money supply by an average 9.2 percent in the past year, or the equivalent of $2 trillion, to $24 trillion, according to the broadest measure each uses.
In the U.S., the consumer price index “could go back to 4 percent or even higher,” said Brian Weinstein, who oversees $9 billion in inflation bonds at New York-based BlackRock, the largest publicly traded U.S. fund manager. At the least, “the TIPS market is showing that we’re going back to trend inflation,” he said.
