The TIPS market is looking fairly sedate this morning, so we should be able to get a pretty good idea of how today’s reopening of CUSIP 912828WU0 will go. This will be a 9-year, 10-month TIPS with a coupon rate of 0.125%, plus inflation.
- Bloomberg’s Current Yields page is showing this TIPS – which trades on the secondary market – with a yield to maturity of 0.55% and a price just short of $96 per $100 of value. This TIPS will go at a discount because its auctioned-determined yield will be well above the coupon rate.
- The TIP ETF is currently (11:40 a.m.) trading at $111.97, down very slightly from yesterday’s close.
- The Wall Street Journal’s Closing Prices page shows this TIPS – which matures in July 2024 ended yesterday with a yield of 0.531%.
Based on this data, I’d say the yield should come in right around 0.55%, and I think that is attractive enough for a small investment. I placed my order a few minutes ago.
Non-competitive bids need to be placed before noon.
I’ll be back after 1 p.m. with the auction results.