The U.S. Treasury Market in the Fourth Round of Quantitative Easing

This paper examines U.S. Treasury securities and their reflection on increased inflationary fears in the US. Implications from recent monetary policy suggests conventional Treasury yields have not shown the full extent of rising fears of inflation in financial markets. In this monetary environment, the yields on Treasury Inflation Protected Securities (TIPS) have been more reflective of rising inflation fears. TIPS yields have become increasingly negative in absolute terms during 2020 and 2021. The negative yields on TIPS further suggests that even conventional Treasury investors should be expecting lost purchasing power when they hold onto such securities