The WSJ continues to pay close attention to Pimco's investment strategy. It latest article details Mihir Worah's overweighting of TIPS in the wake of their recent decline (the Real Return Fund had been underweight TIPS previously). "Obviously as far as 2008 is concerned, the party for TIPS is over," Worah told the paper. "But going forward I think they offer good value."

TIPS are signaling deflationary expectations for the next half decade. The five-year TIPS now out yields five-year Treasury notes 3.23 percent to 2.729 percent, a development Worah still seems skeptical about.

"Maybe it will briefly touch zero or near zero in 2009," he said. "But inflation will not remain negative over the next five years. For one year, it could be, but not for the next five years." 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE