Investing - Theory, News & General • Re: Buying TIPS vs. Treasuries when no unexpected inflation

Since I've shown the assumption defines the answer above, I want to ask a related question.

Based upon historical observation, it has been observed that Nominal Treasuries carry an Inflation Risk Premium, and TIPS carry a liquidity (aka Real Risk) premium.

The inflation risk premium increases the break even inflation (BEI) rate (Nominal - TIPS YTM), and the liquidity premium lowers BEI.

If you expected in the future that the TIPS liquidity premium is larger than the nominal inflation risk premium, which would you prefer?

I'll answer the question in a future response.

Statistics: Posted by retiringwhen — Sun Sep 27, 2026 4:05 pm