[tired&retired]

Does anyone know what the index used for the rate change is?

How high can the interest rate go?

How frequently does it change.

These are suicide, just as the variable rate mortgages were for many Americans.

[spald]

There is a comprehensive article in the third section of today's Wall Street Journal that answers your questions regarding TIPS and other possible investments that are designed to have you avoid the inflationary effects of the quantitative easing by the Fed. You probably can go to the WSJ website and read it. Or the library in hard copy.

[tired&retired]

For bonds such as TIPS, the underlying principal of the bond changes, which results in a higher interest payment when multiplied by the same rate. For example, if the annual coupon of the bond was 5% and the underlying principal of the bond was 100 units, the annual payment would be 5 units. If the inflation index increased by 10%, the principal of the bond would increase to 110 units. The coupon rate would remain at 5%, resulting in an interest payment of 110 x 5% = 5.5 units.

The most liquid instruments are Treasury Inflation-Protected Securities (TIPS), a type of US Treasury security, with about $500 billion in issuance.