The recent proposal by the Obama administration to change the inflation index component from a simple CPI to a chain weighted CPI has caused some degree of consternation and concern. This concern comes not only from seniors but also from those involved in the TIPS markets. While the amount of the difference is relatively small, the point is that this move represents a significant step towards the active management of price data. TIPS buyers were initially drawn to this market as a hedge against core inflation. If TIPS owners begin to feel like the Government is haircutting them for their own budgetary needs, then that market will struggle to maintain its integrity and thus its liquidity. The more important takeaway from this latest sleight of hand, is that that we have a Central Bank desperately trying to create inflation, while at the same time we have its own Government trying to dampen its ultimate effects. While we have maintained that the timing of the unfolding inflation story is uncertain, the anecdotal evidence surrounding its emergence continues to build.