Inflation Linked Bond
Inflation Linked Bond — Bond with principal/coupons linked to inflation.
Definition
Inflation Linked Bond refers to bond with principal/coupons linked to inflation. Keep that definition fixed when comparing series, managers, or regimes — renaming the same tape does not create a new signal.
Why it matters
Duration, curve, and carry decide whether a macro view survives into P&L. When bond with principal/coupons linked to inflation shifts, related hedges, limits, and narratives usually need an explicit update rather than a quiet assumption.
Case
Suppose a desk is positioned for the opposite of what inflation linked bond is saying. If bond with principal/coupons linked to inflation moves against that book, the first question is not “is the story clever?” but whether size, hedges, and stop logic still match the observation.
How to read it
Always state the tenor and roll-down assumption; parallel-shift shortcuts hide curve risk. Prefer a short written null hypothesis for Inflation Linked Bond: what would falsify the current reading in the next window?