Outlook for Inflation, Oil Supports TIPS and Linkers

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Outlook for Inflation, Oil Supports TIPS and Linkers

Jeremie Banet, portfolio manager on PIMCO’s real return team, explains why our outlook for oil prices and inflation supports select investments in inflation-linked bonds.

Oil has the potential to reach $50 per barrel or more this year and inflation may climb above market expectations. These trends suggest U.S. Treasury Inflation-Protected Securities (TIPS) and inflation-linked sovereign bonds (“linkers”) in Italy and Mexico may offer attractive investment opportunities.

For a closer look at breakeven inflation and Federal Reserve inflation views, see this recent blog post.

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