Inflation-Protected Security - IPS
Categories: Bonds
See: Inflation-Indexed Security.
Inflation-protection was a big deal in the '70s when we, uh, had inflation. Since Jimmy Carter squashed it to smithereens, we haven't had all that much: something like 2-3% a year on average. Banal at best. Nothing like the exciting double-digit era.
But as an outgrowth of those who lived and paid their adjustable-rate mortgages in that era (which saw payments balloon to be double or triple where they were a decade earlier), investor demand for inflation-adjustable things became a...Thing. So IPS are common now with the issue of government paper...things like Treasury Notes and other forms of bonds and bond-like entities.
A base rate might be, say, 3%...with the assumption that inflation will be 2.5%. If inflation ends up being 2.7% in that period, then rates on the underlying bond usually get adjusted upwards: 20 basis points or something like that.
See: TIPS.