Summary
- The real yield is likely to come in around 0.57%, well below the coupon rate of 0.875%.
- That means buyers could be paying a premium of nearly 3% to capture that coupon rate. Is that too high a price to pay?
- The inflation breakeven rate is currently running at about 1.82%, meaning this TIPS is close to fair value versus a nominal Treasury.
The U.S. Treasury announced last week that it will offer $11 billion in a reopening auction Thursday of CUSIP 9128285W6, creating a 9-year, 8-month Treasury Inflation-Protected Security.
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Treasury Inflation-Protected Securities 
It is true that I could have redeemed it when the rate was 1.9%, and maybe could have earned more…