How the face value of a US Treasury TIPS is adjusted daily?

The current principal value of a US Treasury TIPS is adjusted with the following formula:

$P_t={\displaystyle \frac{{\mathrm{CPI}}_t}{{\mathrm{CPI}}_o}}\times P_o$
$P_t=\text{Current Principal}$
$P_o=\text{Original Principal}$
${\mathrm{CPI}}_t=\text{Current Reference CPI}$
${\mathrm{CPI}}_o=\text{Original Reference CPI}$

The Bureau of the Fiscal Service of the U.S. Department of the Treasury publishes reference CPI numbers monthly. Reference CPI index ratios for all outstanding US Treasury TIPS are also included in the sample publication.

The following images shows the first page of the Bureau of the Fiscal Service's publication for daily reference CPI numbers and index ratios for month of May, 2025 released on April 10, 2025.

Apparently, reference CPI numbers of May 2025 were calculated based on last 3-month the non-seasonally adjusted U.S. City Average All Items Consumer Price Index for All Urban Consumers (CPI-U (NSA)) numbers, which were published by the Bureau of Labor Statistics of the U.S. Department of Labor.

CPI-U (NSA) January 2025    317.671
CPI-U (NSA) February 2025   319.082
CPI-U (NSA) March 2025      319.799

  Ref CPI May 1, 2025       319.08200 
  Ref CPI May 2, 2025       319.10513 
  Ref CPI May 3, 2025       319.12826 
  Ref CPI May 4, 2025       319.15139
  Ref CPI May 5, 2025       319.17452
  ...

We don't know what formula was used for the above calculation.

For the latest and historical reference CPI numbers and index ratios, please see official TIPS/CPI Data Website.

Once we know daily reference CPI numbers, we can calculate the index ratio and principal adjustment of any given US Treasury TIPS now.

For example, you bought $10,000.00 principal value of the 20-year TIPS originally issued on January 31, 2006, the adjusted principal value on May 1, 2025 can be calculated as:

CUSIP: 912810FS2
Series: D-2028
Dated Date: 2006-01-15
Original Principal: $10,000.00

Original Ref CPI on January 15, 2006: 198.47742
Current Ref CPI on May 1, 2025: 319.08200
Index Ratio: 319.08200 / 198.47742 = 1.6076488700831 = 1.60765

Current Principal: 1.60765 * $10,000.00 = $16,076.50

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