30-Year TIPS Reopening Auctions With A Disappointing Real Yield Of 0.88%

Summary

  • Long-term real yields have been declining slightly while short-term yield are rising sharply.
  • A yield of 0.88% is very close to this TIPS’ coupon rate of 0.875%. The adjusted price is close to par, when accrued inflation is added in.
  • The inflation breakeven rate of 1.84% is attractive — and the reason this auction was greeted with apparent strong demand.

Read my full analysis on SeekingAlpha.com

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About Tipswatch

Author of Tipswatch.com 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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1 Response to 30-Year TIPS Reopening Auctions With A Disappointing Real Yield Of 0.88%

  1. jim says:

    Happy I sat this one out. Real yield today .974

    Had a weired feeling real yield wasn’t going to be good. Since we are in a rising rate environment I actually expect to see higher real yields coming down the pipeline, otherwise there will be a rise in inflation which is up 1.2% since February.

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