Thursday’s 10-Year TIPS Reopening Looks Attractive, But …

Summary

  • The current trend indicates a real yield around 0.88%, which is attractive, at least based on auctions over the last seven years.
  • The problem? A 5-year TIPS is currently yielding 1 basis point higher than a 10-year. Why buy a longer-term with a lower yield?
  • The inflation breakeven rate is trending at 2.12%, still in the “neutral zone” and below current U.S. inflation of 2.7%.

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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