TIPS index ratio
The factor by which a TIPS's principal has grown with inflation since it started to accrue interest: the reference CPI of the day divided by the reference CPI on its dated date.
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How it is computed here
The Treasury publishes a reference CPI for every calendar day, built from the monthly consumer price index with a lag of about three months. A TIPS's ratio on a day is that day's reference CPI over the one on its dated date, to five decimals; its adjusted principal is 100 times the ratio, its real coupon is paid on that adjusted principal, and our price is the real price times the ratio. At maturity the principal returned is the adjusted one, never less than the original face value.
Worked example
- TIPS 0.125% 2031-07-15 began to accrue interest on 15 Jul 2021, when the reference CPI was 268.02090; on 2 Oct 2026 the Treasury's reference CPI is 333.952.
- Index ratio = 333.952 ÷ 268.02090 = 1.24599: every 100 of original principal is now 124.599 of adjusted principal.
- On 10,000 of face value that is 12,459.90 USD of adjusted principal; at maturity the principal repaid is the adjusted amount of that day, never less than the original face value.
Real Treasuries valued today on the Treasury's par curve: our estimates, not dealer quotes, and no yield here is a return anyone is owed. The demo holds none; signed in with a Treasury of your own, this is worked on yours.
Where it misleads
The ratio records inflation that has already happened; it says nothing about future inflation. A TIPS's yield is a real yield, above inflation, and our price for it is an estimate that can differ from market prices by more than a point. The payments we show use today's ratio; each real payment will be scaled by the ratio of its own date.
The formula
- Ratio — the index ratio on the day;
- RefCPI(day) — the Treasury's reference CPI for that calendar day;
- RefCPI(dated date) — the reference CPI on the TIPS's dated date, the day interest starts to accrue;
- Adjusted principal — what every 100 of original principal is worth on the day.
A worked example on a real Treasury
The Treasury Inflation-Protected Security TIPS 0.125% 2031-07-15 (ISIN US91282CCM10) was issued on 30 July 2021, dated 15 July 2021, when the reference CPI was 268.02090. On 1 October 2026 the Treasury's reference CPI is 333.918. Ratio = 333.918 ÷ 268.0209 = 1.24587: every 100 of original principal is now 124.587 of adjusted principal. On 10,000 of face value that is 12,458.70, and the 0.125 % real coupon is paid on it: 0.0625 % every six months, 7.79 per period. At maturity, on 15 July 2031, the principal repaid will be the adjusted amount of that day, never less than the original 10,000. The price figures for this TIPS are our estimates from the Treasury's real curve, not dealer quotes, and can differ from market prices by more than a point.
What this page does not do
It does not say what inflation will be, and it does not say what the principal will be at maturity: only what inflation has done since the TIPS began. Whatever the ratio, the repayment at maturity is never below the original face value.
Compared with
- Clean and full price — the price that is quoted per 100 of this adjusted principal
- Yield to maturity — the real yield that comes from that price
- Modified duration — how much the price moves with the real yield
Questions people ask
Does the index ratio predict inflation?
No. It records the inflation that has already happened since the TIPS began to accrue interest. Nothing in it says what the next months will bring.
Can the principal fall below the original?
In between, the ratio can fall below 1 if prices fall, and so can the adjusted principal. At maturity, the Treasury repays at least the original face value, whatever the ratio then is.
Sources
Last reviewed 2026-10-02 by Sphinx Risk.