Sad To Say, This Week’s New 10-Year TIPS Might Be One To Skip

Summary

  • The trend is pointing toward a real yield to maturity of around 0.88%, down substantially from levels in November and December.
  • The inflation breakeven rate is currently at 1.83%, a favorable number that should boost demand for this new TIPS from big-money investors.
  • Think interest rates are heading lower? Then buy this TIPS. Otherwise, patience.

A few months ago, I had targeted this new 10-year TIPS as a purchase, in the hopes of a real yield and coupon rate of at least 1.00%. In “normal” times, a 10-year TIPS offers the sweet spot of a higher yield than shorter terms and a reasonable term to hold to maturity. It is the perfect term for building a ladder of bonds stretching 10 years into the future.

But ….

Read my full analysis on SeekingAlpha.com

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