Matt Grossman

speaker

182 appearances 3 recordings 1 series first heard Apr 2022 last heard Jan 2025

Matt Grossman’s voice in public audio — every appearance, attributed to the second.

Trend

recordings per month · last 12 months

No recordings in the last 12 months.Older appearances are listed below; set an alert to hear about the next one.

Appearances

newest first · ▶ plays the moment

WSJ Your Money Briefing · Why Inflation-Protected Bonds Aren’t Keeping Up With Inflation · 10 Oct 2022 podcast

And the government's promising you that you'll get that money back when the bond matures.

Now, the inflation process

protection comes into play in that as inflation raises prices, the government will give you an upward adjustment to, in effect, how much money they owe you when the bond comes due.

So if inflation raises prices by 2%,

in a certain year, then the government will revise up how much it owes you by 2%.

And that will be reflected in higher interest payments for you and also a higher principal or the full amount that you get back when the bond matures.

So to take a basic example, let's say you bought $1,000 worth of tips, five-year tips.

So this year, that means they would mature in 2027.

And just to keep round numbers, let's say that the bonds had a 1% coupon.

And the coupon is basically the interest that you're getting every year from the government.

So if there was no inflation, you'd be getting that 1% coupon a year.

So that's $10 a year.

They pay interest every six months, so you'd be getting $5 every six months.

Of course, there usually is at least some inflation, and lately there's been a lot of inflation.

So in the 12 months through August, inflation was 8.3%.

Prices rose by 8.3% over those 12 months.

So if you owned a TIPS, the government would revise up that $1,000 by 8.3%.

And so the interest that you got from the government would also go up by the same percentage.

So instead of getting $5 every six months,

you would get $5.42.

Showing 81–100 of 182 · page 5 of 10