10-Year TIPS: This Week’s Auction Looks Attractive, Sort Of

Summary

  • CUSIP 912828Y38 is a new 10-year TIPS that currently projects to have a real yield of 0.72% and a coupon rate of 0.625%.
  • But a lot can change before the July 19 auction. Can the real yield rise above 0.75% and generate a coupon rate of 0.75%?
  • No TIPS auction has had a coupon rate of 0.75% since May 2011.

Read my full analysis on SeekingAlpha.com

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U.S. Inflation Rose 0.1% In June, Slightly Lower Than Expected

Summary

  • The headline inflation increase was below the consensus estimate of 0.2%, but year-over-year inflation hit 2.9%, highest since February 2012.
  • Core inflation increased 0.2%, matching expectations.
  • Non-seasonally adjusted inflation increased 0.16% in June, triggering higher principal balances for TIPS in August and marking the midpoint of the I Bond rate-setting period.

Read my full analysis on SeekingAlpha.com

Also, I have updated my I Bonds and Inflation page with the new numbers.

And here are the new August Inflation Indexes for all TIPS.

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Nearing 65? Don’t Get Caught By Medicare’s ‘Money Traps’

Summary

  • Medicare isn’t free and in fact may end up costing more than you expect.
  • High-income earners may face substantially higher prices for Medicare coverage, as much as $8,800 a year in extra costs for a couple.
  • Which Medigap plan is best? If you want comprehensive coverage and travel overseas, choose Plan G over Plan F.

Read my full analysis on SeekingAlpha.com

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30-Year TIPS Reopening Auctions With A Real Yield Of 0.934%

Summary

  • The result matched market expectations, so no surprises.
  • Investors had to pay a premium to get the coupon rate of 1.0%, with an adjusted price of about $103.31 for about $101.57 for par value.
  • The inflation breakeven rate came in at 2.12%, exactly where it was in the February originating auction.

Read my full analysis on SeekingAlpha.com

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Say ‘No’ To This Week’s 30-Year TIPS Auction

Summary

  • While shorter-term real yields have been gradually increasing, the 30-year yield has actually been declining.
  • Investors at Thursday’s auction will probably pay a 2% premium over par value because this TIPS currently has a market yield below the coupon rate of 1.00%.
  • On the positive side, the current inflation breakeven rate of 2.13% is reasonable and attractive.

Read my full analysis on SeekingAlpha.com

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Annual U.S. Inflation Hits 6-Year High In May Report

Summary

  • ‘Headline’ inflation rose 0.2% in May, but is up 2.8% over the last 12 months, highest since February 2012.
  • Core inflation also increased 0.2%, showing that gasoline prices are not the sole source of inflationary pressure.
  • Non-seasonally adjusted inflation was up 0.42% in May. What does this means for holders of TIPS and I Bonds?

Read my full analysis on SeekingAlpha.com

Also, I have updated my Inflation and I Bonds page with the new numbers.

And here are the new July inflation indexes for all TIPS.

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Here’s A Step-By-Step Guide To Using The Treasury’s New Savings Bond Calculator

Summary

  • The Savings Bond Wizard has been a useful tool for Savings Bond investors for more than 15 years. Now it is gone.
  • The Treasury has replaced it with the Savings Bond Calculator, a similar Web-browser-based tool that is a bit less user friendly.
  • I’ve created a step-by-step guide for exporting your bond data from the Wizard to the Calculator.

Read my step-by-step guide at SeekingAlpha.com

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