New 10-Year TIPS Nabs 7-Year High Coupon Rate Of 0.75%

Posted on July 20, 2018 by

Summary

  • Today’s result broke a string of 42 consecutive TIPS auctions of the 9- to 10-year term with a coupon rate below 0.75%.
  • The actual real yield to maturity was 0.762%, slightly lower than expected, indicating good demand.
  • But the inflation breakeven rate dipped to 2.08%, below very recent trends and indicating less-than-strong demand.

Read my full analysis on SeekingAlpha.com

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

Posted on July 15, 2018 by

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

Posted on July 12, 2018 by

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’

Posted on July 2, 2018 by

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%

Posted on June 21, 2018 by

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

Posted on June 17, 2018 by

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

Posted on June 12, 2018 by

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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