From Hardassetsinvestor.com: Treasury Inflation-Protected Securities (TIPS) do exactly what their name suggests. They are U.S. Treasury bonds designed specifically to protect investors against inflation. To do that, both the interest and the principal payments are indexed against the Consumer Price Index.
So the yield quoted on a TIPS security is a “real” return; that is, an incremental return that’s added to the rate of inflation…. Full Article: Source