The U.S. Treasury announced today that it auctioned a new 30-year Treasury Inflation-Protected Security, with a coupon rate of 0.625%, and a yield to maturity of 0.639%. This is CUSIP 912810RA8.
Buyers are getting a yield well above the record low for a 30-year TIPS, 0.479% for a reissue in October 2012. Today’s auction broke a string of five consecutive 30-year TIPS auctions (issues and reissues) that set records lows. I think that is significant.
Here’s the Treasury announcement.
I just read all of the above, as always, very helpful and informative. Yes, predicting inflation, stock market, rates, etc.…
I try not to predict inflation and interest rates., unless I really have to. My strategy is to stick with…
Thanks for thiis blog post
I think the mistake that is made, every asset needs to keep up with inflation during inflation. Stocks pay you…
Interesting that you settled on 35% equities. The long time allocation of the highly successful Wellesley Income Fund (since 1970).
Treasury Inflation-Protected Securities 
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Joe, I like this 30-year TIPS in a Roth IRA, as long as you can hold to maturity. All future growth will be tax free. If inflation really rises you are doubly protected – against inflation and taxes. And yes, it is likely that February CPI-U will tick up because of rising gas prices.
Initially I thought this was going to be a real yield of .6, so a real yield of .639 with a coupon of .625% was a surprise. I bought this auction with my roth ira contribution for 2013 at fidelity. It will be interesting to see what the real yield will be in June during the reissue auction. It is really hard to guess. I think either we will have a higher CPI-U inflation or number or we may possibly have a higher yield. I don’t think both numbers will be supressed by June with the increased gasoline prices.