how does an inflation swap work 
an inflation swap is a contract where one party agrees to pay a fixed rate and the other pays a floating rate based on an inflation index the bottom linea zero coupon inflation swap is where a debt instrument with an inflation adjusting interest payment is sold to another investor for a fixed amount delivered at maturity investors use it as a way to hedge against inflation correction aug 23 2023 a previous version of this article did not specify the point at which two investors engaged in a zero coupon inflation swap would break even content was added to reduce any confusion and address the inflation rate at which a breakeven would occur 