Treasury Inflation-Protected Securities

• 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.

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• 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.

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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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• 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.

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