THE MICROSTRUCTURE OF THE TIPS MARKET by ProQuest

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									Michael J. Fleming and Neel Krishnan




The Microstructure
of the TIPS Market

• The potential advantages of Treasury inflation-                                       1. Introduction
   protected securities have yet to be fully
   realized, mainly because TIPS are not as
   liquid as nominal Treasury securities.                                         T     he introduction of Treasury inflation-protected securities
                                                                                        (TIPS) in the United States in 1997 offered multiple
                                                                                  potential benefits. First, the development was intended to offer
• The less liquid nature of TIPS may adversely                                    investors a security that would enable them to hedge inflation.
   affect prices relative to those of nominal                                     Seco
								
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