Bernanke TIPS Trip Bears As Fed Fails To Spur Costs

For Federal Reserve Chairman Ben S. Bernanke, there may never be a better time to stop buying U.S. government debt.

With the Fed on pace to complete the planned purchase of $300 billion of Treasuries in September, the exit of this year's biggest buyer is unlikely to raise yields by depressing prices, the world's largest bondholders say. The market for Treasury Inflation Protected Securities shows traders expect inflation over the next 10 years to average 1.96 percent, which is 0.74 percentage points less than the past decade's average and too little to erase the value of bonds' fixed payments.