New 5-Year TIPS Auction Is Suddenly Looking Like A Loser


  • Real yields have declined sharply in recent days, dropping the 5-year yield to 0.03%.
  • When the 5-year TIPS yield approaches zero, I Bonds and bank CDs become attractive alternatives.
  • Inflation expectations have been declining over the last month, even as demand for TIPS rises.

The U.S. Treasury on April 20 will auction $16 billion in a new 5-year Treasury Inflation-Protected Security (CUSIP 912828X39). The coupon rate and real yield to maturity (after inflation) will be determined at the close of the auction.

Read my full analysis on


About Tipswatch

Author of blog, David Enna is a long-time journalist based in Charlotte, N.C. A past winner of two Society of American Business Editors and Writers awards, he has written on real estate and home finance, and was a founding editor of The Charlotte Observer's website.
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3 Responses to New 5-Year TIPS Auction Is Suddenly Looking Like A Loser

  1. jim says:

    NOT a good deal. I’m gonna pass on this one!!

  2. Jimbo says:

    With a current yield of -0.18%, 5 year TIPS are dogs right now. A month ago, it was flirting with zero. I was hoping that it would be in positive territory by now. Nope. So, this is another auction that I’ll have to pass on.

    Back in 12/14, these were yielding nearly 0.4%. Due to deflation, the adjusted principal value has only gone up a little over 1%. I’m getting more than that in an IRA savings account. I love the concept of inflation adjusted bonds, but the reality of the matter is that they are poor investments.

  3. Joseph Keenan says:

    Even though inflation projections are fairly tame, in a five year period it could be higher than Fed goal. I will be maxing out my Ibonds, so this purchase would be after Ibond allotment. I like the inflation protection that I will be getting even though rates are low. Am I wrong?

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