TIPS (TIP) vs Intermediate Treasury (IEF)
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
TIP/IEF is cleaner for isolating breakeven inflation than TIP/TLT because IEF and TIP have similar duration profiles. TIP outperforming IEF signals rising breakeven inflation. IEF outperforming TIP signals falling breakevens and expected disinflation. The ratio tracks the inflation expectations component directly.
Cross-Asset Analysis
TIPS (TIP) captures iShares TIPS Bond ETF, inflation-protected Treasuries, whereas 7-10Y Treasury (IEF) reflects iShares 7-10 Year Treasury Bond ETF, and the difference between how they move is what the peer pair relationship is really about. Pairs trading between TIPS (TIP) and 7-10Y Treasury (IEF) is common because the spread is more stationary than either individual price, suitable for mean-reversion strategies. Corporate action events, including buybacks or spin-offs affecting constituents of TIPS (TIP) or 7-10Y Treasury (IEF), can distort the spread relative to its intended factor tilt.
The TIPS (TIP)-7-10Y Treasury (IEF) spread captures the tilt between two variants of the same asset: one may be more defensive, one more cyclical. Factor tilts expressed through the TIPS (TIP)-7-10Y Treasury (IEF) selection allow managers to adjust style exposure without changing their overall asset allocation. A peer comparison like TIPS (TIP) against 7-10Y Treasury (IEF) strips out the common-factor beta and leaves behind the differences in sector mix, capitalization, style, or geography.
Structural changes inside TIPS (TIP) or 7-10Y Treasury (IEF), such as index reconstitution or methodology shifts, can break historical spread relationships in discrete jumps. Overlay strategies trade the TIPS (TIP)-7-10Y Treasury (IEF) spread through options or swaps when the underlying pair is directly tradable, sizing against realized spread volatility.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between TIPS (TIP) and 7-10Y Treasury (IEF)?+
TIPS (TIP) and 7-10Y Treasury (IEF) are connected through shared asset class exposure with different factor tilts. When the underlying asset class shifts, both respond, though with different sensitivities and at different speeds. The spread between TIPS (TIP) and 7-10Y Treasury (IEF) captures the specific macro signal that flows through this relationship.
When does TIPS (TIP) typically lead 7-10Y Treasury (IEF)?+
TIPS (TIP) tends to lead 7-10Y Treasury (IEF) during rotation episodes between the two factor exposures. In those periods, moves in TIPS (TIP) precede corresponding moves in 7-10Y Treasury (IEF) by days to weeks, depending on the transmission channel and the depth of each market.
How are TIPS (TIP) and 7-10Y Treasury (IEF) historically correlated?+
Long-run correlation between TIPS (TIP) and 7-10Y Treasury (IEF) varies by regime. Peers in the same asset class are highly correlated in direction, with the spread reflecting factor tilts and rotation dynamics. The correlation is not stable: it shifts with macro conditions, and the periods when it breaks down are often the most informative moments in the TIPS (TIP)-7-10Y Treasury (IEF) relationship.
What macro conditions drive divergence between TIPS (TIP) and 7-10Y Treasury (IEF)?+
Divergence between TIPS (TIP) and 7-10Y Treasury (IEF) typically arises from index reconstitution, mega-cap earnings surprises, or liquidity differences between the peers. When one asset's idiosyncratic drivers dominate, the spread moves in ways that the common macro story does not predict, which is usually a signal to look more carefully at the specific drivers at work in TIPS (TIP) or 7-10Y Treasury (IEF).
Is TIPS (TIP) a hedge for 7-10Y Treasury (IEF)?+
Peers like TIPS (TIP) and 7-10Y Treasury (IEF) do not hedge each other; both rise or fall with the shared asset class, and using the pair as a spread trade is different from using it as a hedge. Effective hedging requires matching the hedge to the specific risk being protected, and the TIPS (TIP)-7-10Y Treasury (IEF) pair is best stress-tested under scenarios the investor most worries about before being sized into a real portfolio.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.