Investors bought inflation-protected Treasury securities at a negative interest rate for the first time on Thursday, demonstrating the depth of concerns that Federal Reserve efforts to stimulate the economy could lead to higher inflation in the future.

The $15 billion in Treasury inflation protected securities, or Tips, were sold at a negative yield of about 0.046 per cent. Investors could still make money on their holdings because the principal of such securities increases if inflation rises.

Bill O'Donnell, strategist at RBS Securities, said that investors were accepting "a short-term cost for a potential long-term gain." Treasury securities of all kinds are finding favour as a haven as investors flee the market turmoil in the eurozone.

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