Invesco PowerShares is teaming up with Deutsche Bank, once again, to provide two new exchange traded notes designed to perform based on inflation and deflation expectations.

According to a press release, the PowerShares DB US Inflation ETN (NYSEArca: INFL) and the PowerShares DB US Deflation ETN (NYSEArca: DEFL) will take long or short exposure to changes in the market’s expectations on future inflation levels. INFL takes a long position in TIPS and a short position in U.S. Treasuries, while DEFL takes a short position in TIPS and a long position in Treasuries. Both funds have an expense ratio of 0.75%. TIPS are inflation-protected bonds.

“We are pleased to expand our successful exchange-traded platform to now include TIPS-based products,” Martin Kremenstein, Chief Investment Officer of db-X, said in a separate press release. “By establishing an offsetting position in U.S. Treasuries and neutralizing the impact of changes in the interest rates, we believe the PowerShares DB US Inflation and Deflation ETNs can more effectively target long or short exposure to inflation for investors.”

INFL is based on the DBIQ Duration-Adjusted Inflation Index, and DEFL is based on the DBIQ Duration-Adjusted Deflation Index. The indices quantify future inflation expectations by taking the difference in yields between Treasury Inflation-Protected Securities (TIPS) and regular U.S. Treasury bonds with similar maturities.

If the market expects higher future inflation, TIPs will likely outperform U.S. Treasuries. If the market expects lower inflation levels or a deflationary period, TIPs will likely underperform U.S. Treasuries.

ETNs are senior, unsecured debt obligations issued by financial institutions.

For more information on new product launches, visit our new ETFs category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.