The Treasury jumped the gun – it never does that – and posted results of today’s auction of a 10-year TIPS reopening three minutes early! It’s Friday, folks, and the Treasury people are ready to go home.

The reopening auction of CUSIP 912828XL9 – creating a 9-year, 10-month Treasury Inflation Protected Security – resulted in a real yield to maturity (after inflation) of 0.60%.

Because this TIPS has a coupon rate of 0.375%, buyers are getting it at a discount. The unadjusted price was $97.86 for $100 of par value. But because this TIPS will have an inflation index of 1.00637 at the settlement date of Sept. 30, the adjusted price rises to about $98.49 for $100.64 of value.

The yield of 0.60% is the highest for any 9- to 10- year TIPS since an auction in September 2014, but it is about 15 basis points below the market rate on Thursday, the originally-scheduled date of the auction. The Treasury delayed the auction by one day because of the imminent interest-rate announcement by the Federal Reserve.

The Treasury did well by delaying. The Thursday price would have been about $96.69, about 1.2% less than the Friday result.

Inflation breakeven rate. A nominal 10-year Treasury is trading right now with a yield of 2.16%, setting up an inflation breakeven rate of 1.56% for this TIPS. It will outperform a traditional Treasury as long as inflation averages more than 1.56% over the next 10 years. This puts this TIPS solidly in the ‘cheap’ range – a good buy versus a traditional Treasury.