30-Year TIPS Auctions With A Real Yield Of 1.003%, Highest In 2 Years

Summary

  • The real yield of 1.003% set the coupon rate at 1%, which is favorable for investors.
  • The inflation breakeven rate came in at 2.12%, up 28 basis points from a June 2017 auction of a similar term.
  • The market reaction has been mild; this TIPS generated weaker demand but the yield was close to estimates.

Read my full analysis on SeekingAlpha.com

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U.S. Inflation Jumped 0.5% In January, Higher Than Expected

Summary

  • The 0.5% increase in ‘headline’ inflation was well above the 0.3% consensus estimate.
  • Core inflation rose 0.3%, also above the consensus estimate of 0.2%.
  • Non-seasonally adjusted inflation rose 0.54% in January; what does this mean 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 March Inflation Indexes for all TIPS.

 

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A New 30-Year TIPS? Skip It

Summary

  • 30-year real yields have been climbing, but not as quickly as yields for 5- and 10-year TIPS.
  • The inflation breakeven rate is currently a reasonable 2.15%, making this issue competitive with a nominal 30-year Treasury.
  • Risk/reward just isn’t good enough to justify an investment, unless you can be sure of holding it for 30 years.

Read my full analysis on SeekingAlpha.com

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Looking To Hoard Cash? Consider 4-Week Treasurys

Summary

  • Your cash in brokerage accounts is probably earning near zero. And your local bank or credit union won’t offer you much more.
  • 4-week Treasurys are paying top-of-the-market yields with a very short term. They will react quickly to rising rates, with no credit risk and no interest rate risk.
  • You can buy them with no commission at Treasury Direct and set up automatic reinvestments.

Read my full analysis on SeekingAlpha.com

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New 10-Year TIPS Auctions With A Real Yield Of 0.548%, Highest In 2 Years

Summary

  • The real yield of 0.548% was the highest for any 9- to 10-year TIPS auction since January 2016.
  • The coupon rate was set at 0.500%, the first time in history that any 10-year TIPS received this coupon rate.
  • The inflation breakeven rate climbed to 2.06%, highest in more than three years.

Read my full analysis on SeekingAlpha.com

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New 10-Year TIPS Auction Jan. 18 Is Definitely Worth A Look

Summary

  • The current real yield estimate of 0.54% would be the highest at auction since January 2016.
  • The inflation breakeven rate has inched up to 2.01%, but that’s still attractive enough versus the nominal Treasury’s yield of 2.55%.
  • Looking ahead: 5 more auctions of this maturity in 2018.

Read my full analysis on SeekingAlpha.com

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U.S. Inflation Rose 0.1% In December, Slightly Below Expectations

Summary

  • The headline miss probably isn’t significant, but core inflation rose 0.3%, above the consensus estimate of 0.2%.
  • Non-seasonally adjusted inflation dipped 0.06% in December and I Bond investors may be facing a weak variable rate reset on May 1.
  • Wages increased faster than inflation in December, the BLS said. That’s a trend worth watching. If it continues; real inflation could follow.

Read my full analysis on SeekingAlpha.com

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