Typically, a bond’s price decreases as market interest rates rise. Conversely, a bond’s price increases as market rates fall. The extent of the price change depends on the duration of the bond – which is a measure of the number of years it takes to regain an initial investment. Generally, the longer the duration, the more sensitive a bond’s price is to interest rate movements. TIPS are not exempt from this fundamental rule. While they are designed to provide protection against inflation, if interest rates increase in excess of the rate of inflation, TIPS will inevitably lose value.