This Week’s 5-Year TIPS Reopening Will Reset The Market

Summary

  • Expect volatility in the Treasury market this week because the Federal Reserve’s Open Market Committee will issue a statement Wednesday, one day before the auction.
  • At this point, CUSIP 128286N5 is heading toward a real yield of about 0.35%, 78 basis points below a similar auction in December. Buyers will be paying a premium price.
  • A very low inflation breakeven rate of about 1.48% should bring strong market demand for Thursday’s auction.

The U.S. Treasury on Thursday will reopen CUSIP 9128286N5, auctioning $15 billion of a 4-year, 10-month Treasury Inflation-Protected Security. This is an especially interesting auction because it follows six months of rather dramatic yield declines.

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 This Week’s 5-Year TIPS Reopening Will Reset The Market

  1. Betti giles says:

    Such an interesting article. When l was young my grandma recommended my spouse and l buy we bonds when we could for emergencies.
    Some of thise few bonds we still yielding four
    Percent. We don’t understand the l bonds well but with your article we have learned more and will reread it a few time. Look forward to reading more articles

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