What is the term used to describe the payments that adjust with inflation?

The term that describes payments that adjust with inflation is known as an inflation hedge. This refers to investments or payment structures that are specifically designed to protect against the loss of purchasing power that results from rising prices. When payments are tied to inflation, they typically increase to maintain their real value, ensuring that the recipient's ability to purchase goods and services remains consistent over time.

Inflation hedging is commonly found in financial instruments that are indexed to inflation rates, such as certain bonds or real estate. This characteristic makes them attractive during periods of inflation because individuals or institutions can be assured that the income stream will retain its value despite the deteriorating effects of rising prices.

In contrast, nominal payments represent a fixed amount that does not change with inflation, while fixed payments remain constant over time, which could potentially lose value if inflation rises. The term "inflation resistant" is not commonly used in this context and does not have a standard definition related to payment adjustments for inflation.