A look inside the TIPS Primer

The table of contents and a short excerpt from Chapter 2 of the existing 2026 edition.

CHAPTER 2 · MECHANICS

The Reference CPI: three-month lag by construction

Treasury adjusts TIPS principal using the non-seasonally-adjusted CPI-U the Bureau of Labor Statistics publishes monthly. The adjustment does not use the current month's CPI reading directly. It uses a daily interpolated series called the Reference CPI, defined in the Treasury's own governing regulation, 31 CFR Part 356, Appendix B, which TreasuryDirect cites as the authoritative source rather than restating the math itself.

The formula:

Ref CPI(date) = Ref CPI_M + [(t − 1) / D] × [Ref CPI_M+1 − Ref CPI_M]

where Ref CPI_M is the reference CPI for the first day of the current month, the month containing the date being valued; it equals the BLS CPI-U index reported for the third preceding calendar month, so the Ref CPI for April 1 equals the CPI-U print for January. Ref CPI_M+1 is the following month's value, t is the day of the date being valued, and D is the number of days in that month.

Worked example, reproduced from the regulation itself:
Ref CPI(April 1, 1996) = 154.40. Ref CPI(May 1, 1996) = 154.90.
Ref CPI(April 15, 1996) = 154.40 + (14/30) × (154.90 − 154.40) = 154.40 + (14/30) × 0.50 = 154.40 + 0.23333 = 154.63333.

The three-month offset is the mechanism, not an incidental delay. A Reference CPI value for any given day comes entirely from CPI-U index levels already public roughly three months earlier. Any TIPS holder can therefore look up today's Reference CPI in advance for any future date, up to the point the underlying CPI-U prints are known. That is what makes daily TIPS pricing and accrued-interest calculations deterministic between CPI releases rather than a forecast.

Excerpt ends here. Citation numbers are omitted from this preview; the purchased primer includes the chapter’s source list. The formula and historical example refer to Treasury’s governing regulation.

Complete table of contents

Part I · The instrument

1 · The 2026 opportunity in real yields

2 · Mechanics: indexation, coupons, auctions, the floor

3 · Funds versus individual TIPS: the 2022 lesson

4 · TIPS versus Series I savings bonds

Part II · Execution

5 · Ladder engineering

6 · The 2037-2039 maturity gap

7 · Buying: auctions, brokerages, TreasuryDirect

8 · Taxation

9 · Seasonality, the indexation lag, and the deflation floor

Part III · Edge cases and practice

10 · Inherited accounts, early sales, and methodology risk

11 · Defined-maturity ETFs and professional practice

12 · TIPS, annuities, and the safety-first framework

Appendix · Auction calendar, outstanding-maturities note, glossary, sources

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