10-Year TIPS Reopening Auctions With A Real Yield Of 0.466%

Summary

  • 10-year TIPS yields have been holding under 0.50% even as the Federal Reserve raises short-term rates.
  • The inflation breakeven rate dipped to 1.95%, under the 2.00% mark where it had been riding for most of 2017. Inflation expectations are stable right now.
  • Buyers at today’s reopening got this TIPS at a slight discount and a slightly higher yield than at the originating auction in January.

Read my full analysis at SeekingAlpha.com

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10-year TIPS will reopen at auction March 23; will yield be high enough to be attractive?

Summary

  • A week out, CUSIP 912828V49 is trading with a real yield to maturity of 0.48%.
  • Its inflation-breakeven rate is 2.04%, right in the mid-range of inflation expectations since 2009.
  • Is it a buy? Maybe not at the current yield, but watch for volatility next week.

Read my full analysis at SeekingAlpha.com

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U.S. Inflation Rose 0.1% In February; Now Up 2.7% Over 12 Months

Summary

  • The 12-month increase of 2.7% was the largest since March 2012.
  • Gasoline prices fell in February, moderating overall inflation. But they’re still up 30.7% over the last year.
  • Non-seasonally adjusted inflation rose 0.31%, which will boost the principal balances of TIPS in April. One month is left in the I Bond rate-setting period.

Read my full analysis on SeekingAlpha.com

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

And here are the new TIPS inflation indexes for April.

 

 

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Real interest rates are on the rise — TIPS could get interesting in 2017

Summary

  • The real yield on a 10-year TIPS has risen 29 basis points in recent weeks.
  • At the same time, the inflation breakeven rate has declined – slightly.
  • The driving force? A rise in nominal rates, which will nearly always pull the TIPS yield higher.

Read my full analysis at SeekingAlpha.com

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New 30-Year TIPS Auctions With A Real Yield Of 0.923%

Summary

  • The coupon rate was set at 0.875%, so buyers got it at a discounted price of about $98.76 for $100 of value.
  • The inflation breakeven rate came in at 2.13%, higher than recent auctions.
  • Market reaction to the auction looks mild, but did the yield come in higher than expected?

Read my full analysis at SeekingAlpha.com

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U.S. Inflation Rose 0.6% In January, Largest Increase In Four Years

Summary

  • Year-over-year inflation rose 2.5%, the highest number in nearly five years.
  • Gasoline prices rose sharply in January, but core inflation still rose 0.3% without gasoline. The Federal Reserve will take note.
  • The report is welcome news for holders of I Bonds and TIPS, reversing a flat inflation index over the last three months.

Real my full analysis at SeekingAlpha.com

Also, I have updated by ‘Tracking Inflation and I Bonds‘ page with these new numbers.

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

Posted in Investing in TIPS | 3 Comments

This New 30-Year TIPS Might Not Be A Great Investment

Summary

  • A real yield around 0.91% won’t be enough justify an investment in a highly-volatile issue, even for most buy-and-traders.
  • If you’re older than 60, the 30-year term isn’t appealing as a buy-and-hold investment.
  • This TIPS is likely to be cash-flow negative in a taxable account.

The U.S. Treasury announced Thursday that it will auction $7 billion in a new 30-year Treasury Inflation Protected Security (CUSIP 912810RW0) on Thursday, February 16. I haven’t been a fan of the 30-year TIPS maturity for several years, especially when after-inflation yields are well below the 2% benchmark typical in such a long-term investment.

Read my full analysis on SeekingAlpha.com

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