30-year TIPS reissue auctions at record-low 0.520%

The Treasury today auctioned a 29-year, 8-month reissue of CUSIP 912810QV3, resulting in a yield to maturity of 0.520%. That’s a record-low yield for an 30-year TIPS issue or reissue; the previous low was 0.77%, for this same TIPS when it was first auctioned on Feb. 16, 2012.

The record low isn’t a surprise – this TIPS was trading in the secondary market yesterday at about 0.479%, so the 0.52% was a bit of a positive move for today’s buyers. The auction continues a one-year trend of steadily lower TIPS yields, across all maturities.

The 30-year breakeven rate, which is the difference between yields on a traditional 30-year Treasury and 30-year TIPS, is about 2.17%. This rate ran as high as 2.56% in March, when the U.S. economy appeared to be gaining momentum.

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