- The coupon rate and real yield to maturity for CUSIP 912828S50 will be set by the auction.
- The current market is pointing to a coupon rate of 0.125% and a real yield of about 0.03%.
- Why would buyers be interested? TIPS are very cheap when compared to nominal Treasurys.
I just posted my analysis of the July 21 auction over at SeekingAlpha.com.
I don’t think this is going to be an attractive auction for the small investor, but big-money investors are going to be drawn in by currently very low inflation breakeven rate (1.45%) for a 10-year TIPS. That makes TIPS cheap versus nominal Treasurys.
Are you considering an investment? Read my analysis.