30-year TIPS auctions well above record low

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.

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8 Responses to 30-year TIPS auctions well above record low

  1. joe says:

    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.

  2. tipswatch says:

    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.

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