30-Year TIPS Reopening Auctions With A Real Yield Of 0.908%

Summary

  • The after-inflation yield came in right on target, based on pre-auction trading in this TIPS on the secondary market.
  • The inflation breakeven rate was a moderate 1.92%. This TIPS seems fairly priced versus a nominal 30-year Treasury.
  • Long-term real yields haven’t risen in 2017, even as short-term yields are up about 25 basis points.

Read my full analysis on SeekingAlpha.com

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I Bonds: Here’s My Late-2017 Buying Guide

Summary

  • I Bond investors have entered 2017’s limbo period: Buy now, or wait until November?
  • If you view I Bonds as a short-term investment, buying now seems to be the wisest decision.
  • Investors longing for a higher fixed rate than zero will want to wait until November 1 to see the Treasury’s fixed-rate reset.

Read my full analysis on SeekingAlpha.com

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Is Thursday’s 30-Year TIPS Reopening Another Halloween Scare?

Summary

  • Buy-and-trade investors ought to be at least a little frightened; 30-year TIPS are very volatile investments.
  • The real yield for this TIPS is currently trading very close to the 0.875% coupon rate. It should auction at close to par value, plus accrued inflation.
  • The inflation breakeven rate is about 1.93%, which I consider ‘fair value’ versus a 30-year nominal Treasury.

Read my full analysis on SeekingAlpha.com

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September inflation sets Social Security COLA at 2.0%, new I Bond variable rate at 2.48%

Summary

  • Hurricane-boosted gasoline prices have caused a two-month surge in overall inflation.
  • The Social Security cost-of-living adjustment will be 2.0% for 2018, lower than the Social Security Administration’s projection but higher than looked likely three months ago.
  • The I Bond will get a new variable rate of 2.48% on November 1, an attractive number that was also boosted by the two-month surge in inflation.

Read my full analysis on SeekingAlpha.com

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

And here are the new November inflation indexes for all Treasury Inflation-Protected Securities.

 

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10-Year TIPS Reopens At Auction With A Real Yield Of 0.450%

Summary

  • The after-inflation yield of 0.450% was 20 basis points higher than where 10-year TIPS were trading on September 8.
  • Today’s investors benefited from the Federal Reserve’s announced intention Wednesday to unwind its bond portfolio and continue gradually increasing short-term rates.
  • The inflation breakeven rate of 1.82% is in the mid-range of recent results, but continues to indicate muted inflation expectations.

Read my full analysis on SeekingAlpha.com

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10-Year TIPS Will Reopen Thursday, Here’s What To Expect

Summary

  • The current real yield of 0.34% would fall below results for the last five 9- to 10-year TIPS auctions.
  • At that yield, investors would have to pay a slight premium to par value.
  • The current inflation breakeven rate of 1.86% is solidly in the neutral range. This TIPS isn’t cheap versus a nominal Treasury.

Read my full analysis on SeekingAlpha.com

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August Inflation: Better News For TIPS, I Bonds And Social Security Benefits

Summary

  • CPI-U increased 0.4% in August, an upside surprise that broke a string of smaller-than-expected numbers.
  • Non-seasonally adjusted inflation increased 0.3%, which will boost TIPS principal balances in October and brings the I Bond’s future variable rate up to 1.4%, with one month remaining.
  • Social Security benefits at this point would increase 1.7% in January, but there is one month remaining to complete the calculation. The July prediction of a 2.2% increase is still looking unlikely.

Read my full analysis on SeekingAlpha.com

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

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

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