Monthly Archives: July 2013

Today’s ‘shocker’: Fed will continue bond-buying program

No surprises here. The Federal Reserve noted that the economy is growing slowly and its strategy of near-zero interest rates and monthly bond buying will continue. I’ll just quote today’s Federal Reserve statement on the most predictable news of the … Continue reading

Posted in Investing in TIPS | 2 Comments

Honey, there’s a hole in our TIPS ladder!

Treasury Inflation-Protected Securities are almost entirely risk free when bought and held to maturity. Default risk? As close to zero as you can get. Inflation risk? Covered. Duration risk? Hold to maturity and forget it. Downgrade risk? We’ve been through … Continue reading

Posted in Investing in TIPS | 11 Comments

Why the breakeven rate is important: A TIPS versus Treasury example

I had a 10-year TIPS mature in July and I thought it would be interesting to look at how that Treasury Inflation-Protected Security performed against a traditional 10-year Treasury. Did it outperform? By how much? So here are the basic … Continue reading

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Who should buy Treasury Inflation-Protected Securities?

I was updating my TIPS Q&A page today and I realized that I never really answered this question: Who should buy TIPS? So here we go … First off, I want to state loudly that TIPS are for preserving wealth, … Continue reading

Posted in Investing in TIPS | 10 Comments

10-year TIPS auctions at 2-year-high yield of 0.384%

The U.S. Treasury just announced that its auction of a new 10-year Treasury Inflation-Protected Security resulted in a yield to maturity of 0.384%, the highest in two years for any 9- to 10-year TIPS. This is CUSIP 912828VM9 and it … Continue reading

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10-year TIPS auction: We’ve been jawboned

I have pretty much lost my appetite for Thursday’s auction of a new issue 10-year Treasury Inflation-Protected Security. Why? It’s hard to swallow a jawbone. The jawboning has been coming from Federal Reserve Chairman Ben Bernanke, who last Wednesday afternoon … Continue reading

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U.S. inflation rose a sharp 0.5% in June

U.S. inflation took a sharp tick upward in June, rising 0.5% on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Analysts were expecting an increase of 0.3%. This is ‘headline’ inflation, technically called the Consumer Price … Continue reading

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Ben Bernanke’s boost to bonds

Federal Reserve Chairman Ben Bernanke might have been feeling a little guilty about being so honest about the Fed’s  future ‘tapering’ of purchases of Treasury bonds. Bernanke’s heads-up (once in May and again in June) resulted in a dramatic increase … Continue reading

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Next up: New 10-year TIPS to be auctioned July 18, 2013

The U.S. Treasury will announce tomorrow that it will be auctioning a new-issue 10-year Treasury Inflation-Protected Security on July 18. This will be CUSIP 912828VM9. The coupon rate and yield to maturity will be set at auction. Update: Here is … Continue reading

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Good economic news? Bad for TIPS, until …

Soon after I woke up Friday morning, I heard on the radio that the U.S. economy had created 195,000 jobs in June and many more in April and May than was previously thought. My immediate thought was: “Ooops, that won’t … Continue reading

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