Inflation-indexed bond

Daily inflation-indexed bonds (also known as inflation-linked bonds or colloquially as linkers) are bonds where the principal is indexed to inflation or deflation on a daily basis. They are thus designed to hedge the inflation risk of a bond.^[1] The first known inflation-indexed bond was issued by the Massachusetts Bay Company in 1780.^[2] The market has grown dramatically since the British government began issuing inflation-linked Gilts in 1981. As of 2019, government-issued inflation-linked bonds comprise over $3.1 trillion of the international debt market.^[3] The inflation-linked market primarily consists of sovereign bonds, with privately issued inflation-linked bonds constituting a small portion of the market.

^ income taxes bring some inflation risk back to such bonds. See tax on the inflation tax.
^ Shiller, Robert J. (2005). "The Invention of Inflation-Indexed Bonds in Early America". In Goetzmann, William N.; Rouwenhorst, Geert K. (eds.). The Origins of Value: The Financial Innovations that Created Modern Capital Markets. Oxford: Oxford University Press. doi:10.3386/w10183. ISBN 0-19-517571-9.
^ Barclays Capital Research A (2019-04-10). "Global Inflation-Linked Products: A User's Guide".

[1] taxes bring some inflation risk back to such bonds. See tax on the inflation tax.

[2] Shiller, Robert J. (2005). "The Invention of Inflation-Indexed Bonds in Early America". In Goetzmann, William N.; Rouwenhorst, Geert K. (eds.). The Origins of Value: The Financial Innovations that Created Modern Capital Markets. Oxford: Oxford University Press. doi:10.3386/w10183. ISBN 0-19-517571-9.

[3] Barclays Capital Research A (2019-04-10). "Global Inflation-Linked Products: A User's Guide".

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